Quest for the Next Big Tradable Trend

Quote from nravo:

I'm not a trend follower, generally. But I suspect that if you have the patience, the capital, can take the drawdowns, and they have been painful the past couple months, then this is a trend to play long term. Lot of ifs, though. And your also hoping to catch the break out, that could be months away or who knows how much longer. Do trend followers generally do that? I also don't see a lot of contracts outstanding, so where is the smart money? Not here. I wish they had options on this contract. It make this period easier to swallow.
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I think the big money trades volatility thru vol swaps OTC...may explain why not much interest in the VBI future.

VIX just keeps on falling as the mkt is in a tight range -- can't really pull the trigger (to go long) when you see day after day it gets slammed down-- I also think some of the big houses are/have been long vol and hurting. Even if they had options on the VBI it wouldn't be worth trading it given the low liquidity in the underlying VBI -- bid-offer spreads would be very wide. I wish that there is a more liquid contract to take vol bets. For the time being, I'd just watch it to see how far it would sink before making a bottom. There is definetely a play on the long side ..just a matter of time.
 
i think that cchina is overplayed rightnow but canada is a new strong trend, with commodities and the like (ie canadian miners, oils etc) their currency will become stronger as people appreciate they have a lot of needed commodities.

(USA #1 importing of oil comes from Canada)
 
First post - UK based.

Haven't read the entire thread but from what I have read I think those with a view on the Dollar / interest rates and their predictive value for equities and the economy generally will find the following by Gary Carmell a facinating read:

http://www.cwscapital.com/pubs/qupdates/050130/change.html

He makes a pretty persuasive case for US interest rate hikes falling far short of the consensus forecast over the next 12-18 months. If he's right? - dollar down further; credit bubbles continue; deficits remain astronomical; equities up; yield curve inverting (with decreasing foreign interest in US paper pushing long rates up - etc, etc - and a slow grind into deflationary recession. UK yield curve aleady inverted. An ugly few years ahead as 2005 plays out in fact.
 
Quote from nimrod:

First post - UK based.

Haven't read the entire thread but from what I have read I think those with a view on the Dollar / interest rates and their predictive value for equities and the economy generally will find the following by Gary Carmell a facinating read:

http://www.cwscapital.com/pubs/qupdates/050130/change.html

He makes a pretty persuasive case for US interest rate hikes falling far short of the consensus forecast over the next 12-18 months. If he's right? - dollar down further; credit bubbles continue; deficits remain astronomical; equities up; yield curve inverting (with decreasing foreign interest in US paper pushing long rates up - etc, etc - and a slow grind into deflationary recession. UK yield curve aleady inverted. An ugly few years ahead as 2005 plays out in fact.
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Haven't read the link yet but, I'm on board with the basic scenario but still trying to reconcile rising rates and deflation. I'm more looking for an inflationary recession w/ inflation spurred more from foreign demand for commodities.

And yes, UK yield curve and US curve flattening looks negative. Still, US inversion could take another year or so. Ideally UK would sink into recession first, giving those on the other side of the lake a good advance warning.

Hey, I can dream can't I??:)
 
Quote from nimrod:

First post - UK based.

Haven't read the entire thread but from what I have read I think those with a view on the Dollar / interest rates and their predictive value for equities and the economy generally will find the following by Gary Carmell a facinating read:

http://www.cwscapital.com/pubs/qupdates/050130/change.html

He makes a pretty persuasive case for US interest rate hikes falling far short of the consensus forecast over the next 12-18 months. If he's right? - dollar down further; credit bubbles continue; deficits remain astronomical; equities up; yield curve inverting (with decreasing foreign interest in US paper pushing long rates up - etc, etc - and a slow grind into deflationary recession. UK yield curve aleady inverted. An ugly few years ahead as 2005 plays out in fact.
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Finished it - that is a good article. Funny he mentions being unable to locate the book "The History of Interest Rates." I ordered that book from Amazon three months ago but the shipment never arrived. Now shud get a re-shipment this week.

He guesses the 10-year yield will be at 3.5% by year end even as we inch closer to recession. That would really set up a Japan-like scenario, with falling rates and simultaneous falling asset prices. Ouch.
 
The slow march to recession, with falling rates, is a possibility I think about, especially when job numbers are low, like last week, and espacially when I am short the 30 year. I'm tempted to cut the loss on that trade now, just in case the Japan scenario occurs. The only reason I don't is that I was short the 10 year in March two years ago, was getting, understandably killed, cut my loss only to miss the rebounding spike up in rates, for a while, anyway. Still, while it may not be wise to be short long bonds now. I can't see being long, either.
 
Quote from BlueHorseshoe:

Finished it - that is a good article. Funny he mentions being unable to locate the book "The History of Interest Rates." I ordered that book from Amazon three months ago but the shipment never arrived. Now shud get a re-shipment this week.

He guesses the 10-year yield will be at 3.5% by year end even as we inch closer to recession. That would really set up a Japan-like scenario, with falling rates and simultaneous falling asset prices. Ouch.
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Yeah, I see the History of Interest Rates all over Amazon; he must be looking for a first edition in HC with DJ.
 
Quote from Cutten:

Another major long-term trend IMO (as in 5-10 years) is Japanese smallcap stocks, and Japan real estate stocks.

Japan has had a 14 year economic stagnation which is has only just looked like coming out of. Any business, especially a smaller company, which has survived this environment will have cut fat to the bone, will be fairly well managed, or inherently a very resilient business. Real estate is even more extreme - prices have been falling for ages until recently, imagine trying to make money in real estate when the values decline each year. So any remaining solvent developers, and any financially solid real estate investment companies should be good investments. Finally, govt bonds are yielding 1.5% - eventually as economic growth picks up, and stocks come slowly back into fashon, people will not be satisfied with that return and thus some of the huge amounts of money invested in JGBs will shift into stocks.

I wouldn't just go and buy an index or a Japan fund. Rather I would be looking for promising small growth stocks that in 5-10 years time could be billion dollar businesses. Japan now reminds me of the US or UK market in 1993-95 - plenty of gems to be unturned in the next couple of years, and the likelihood of solid returns for the medium to long term. I would also avoid exporters due to the likelihood of a slowly strengthening Yen.

I have a feeling something might happen with China in 2005 too, but I wouldn't make any bets right now. Overall, I have less long-term ideas now than I have had for some time. So I'm not making any major commitments, just preserving capital for the next opportunity.
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I agree with your analysis but my problem is finding the so called hidden gems in Japan......haven't got a clue where to begin...may have to rely on someone who knows and follows Japanese small caps closely?
 
Talking about Japan, this just came on Bloomberg:

J Bridge, Asian `Small-Cap' Stocks May End 5-Year Win (Update1)

"Feb. 7 (Bloomberg) -- Shares of Asia's smaller companies may break a five-year streak of outperforming the market as slowing economic growth and rising interest rates draw investors toward the region's largest corporations.

Morgan Stanley Capital International's Far East Small Cap Index, whose members have a median market value of $671 million, has beaten the MSCI Far East Index each year since 2000. Japan's J Bridge Corp., a warehouse operator, and Urban Corp., a real- estate developer, led the small-cap benchmark to a 24 percent gain last year. ...."

read the full article at:

http://www.bloomberg.com/apps/news?pid=10000101&sid=a3K7MgknUc2s


(it talks of Asia in general, not Japan in particular)
 
Quote from harrytrader:

Oh there are now Unidentified Financial Objects (UFO) :D

NEW YORK, Dec 16 (Reuters) - Richard Bernstein, chief U.S. strategist at Merrill Lynch, the largest U.S. stock broker, predicts an unidentified "major financial company" will be brought to its knees in 2005 by rising interest rates.
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^^^^^^^
JPM may be too big a bank to fail???;
Rich Bernstein provides as an elitetrader said ''entertainment'',
but Rich is fun to listen to
-trading trends are NOT about prediction anyway.

Big Trends had a nice uptrend chart of Australian stock index;
havent had much time to research that.:

Some in oil & gas sector are still nicely uptrending ;
homebuilders are still nicely uptrending-its not about predicting.
local, mid south real estate still has some opportunities.:cool:
 
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