Trend Following Update - January Recap
January presented some real challenges for trend followers. The month started off with strong trending moves in a number of markets however, by months end several sectors posted reversals and profits eroded.
The CRB had the largest monthly decline since July 2008 and it looks like this trend could continue. We are starting to get new short signals in a number of commodity sectors as markets continue to key off of a strong US Dollar, which is pressuring commodity prices.
The grain sector continues to show weakness. Our Corn, Rapeseed, and Wheat positions are starting to gain momentum.
The meat sector is starting to show weakness again. LTX initiated new short positions in Live Cattle on Friday.
Our Milk trade is starting to show promise as it declined through the week.
Supply concerns continue to send the Sugar market higher. According to a Reuters poll Sugar prices will reach historic milestones by the end of March 2010 as a global supply shortage tightens its grip on the market. It'll be interesting to see how this plays out over the next couple months. Sugar broke out to new highs on Friday.
London Robusta Coffee is keying off of a strong US Dollar and moved lower through the week.
The Metal sector saw the largest counter trend moves on the week with reversals taking place in Palladium, Copper, Gold, Silver, and Platinum.
We stopped out of our Long Tocom Gold positions in LTX.
Palladium moved lower most of the week.
Bond prices firmed up this week as economic data suggests that rates are likely to remain low in the near future.
Two Year Notes broke out to new equity highs this week.
We initiated a new long position with LTX in the Swiss Government Bonds.
Stock Index Futures
Stock Index Futures were lower around the globe.
We stopped out of our NASDAQ position in LTB.
And we stopped out of our MSCI Singapore Index trade for LTX.
We just can't seem to get a clear picture on the Energy sector lately. We're simultaneously holding long and short positions across a number of foreign and domestic energy contracts. The market bias is starting to turn negative at this time and our programs are trigginering new short positions and exiting premature long positions.
This week our long RBOB Unleaded Gas position stopped out.
While our short London Gas Oil position started to show some promise.
LTX is also triggering new short positions in Natural Gas.
The Currency sector is starting to get interesting again. LTX triggered a new long signal in the Yen, and a new short signal in the British Pound.
If you have any questions about the markets or strategies, please visit wisdomtradingsystems.com or contact me directly at shane(@)wisdomfinancialinc.com or 800.854.6354.