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New trade setup from Boris Schlossberg
Boris is an indefatigable experimenter in the markets. Below is a short video with one of his latest efforts at finding advantages over the markets (and over YOU if you don’t have something like this in your quiver of setup “arrows”)
As always – and especially when trying out a new trade setup – stay timid and size appropriately!
Timorous
ETF Trading with Larry Connors: The End of Month Short Squeeze Bear Market Rally
By Larry Connors | TradingMarkets.com | September 27, 2011 08:40 AM
No news was good news and the short squeeze bear market rally I discussed Friday and yesterday morning came to fruition on Monday.
The market is now in neutral territory as both our Country Fund ETF Universe and Main ETF Universe have 2-period RSI readings in the 50’s. Any large movement over the next few days will be tied to Europe. Should there not be unexpected news, the rally will continue because it’s the end of the month (and quarter), and the powers that be would much rather see the market down a bit/flat rather than down 7%. They’ll get their way if the news from Europe cooperates.
Should the market rally over the next few days, it will provide some excellent short opportunities heading into Thursday.
The above is from Larry Connors’ Daily Battle Plan.
To learn more about the Daily Battle Plan – including access to Larry’s daily ETF trading signals, click here for more information.
And for more on ETF trading, be sure to visit us here to check out the book that Stocks, Futures and Options (SFO) Magazine called one of the best trading books of 2009: High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading.
Riots in U.S. Streets?
This seems a bit capricious of the Mayor, to me, but I suppose the same might have been said about someone predicting this in Europe mere months ago?
Delivering Alpha: China – Bubble or Bonanza?
This “panel” (I put the word in quotes because there are only two panelists) provides some extraordinarily important information about the investability of China.
Quantified Trading Strategies with The Machine: Why a Portfolio of Strategies Beats a Portfolio of Stocks
Did you miss our free online presentation, How to Engineer Your Trading Portfolio for Profits?Below is just a part of what Larry had to say about building portfolios of quantified trading strategies compared to the common practice of building portfolios of stocks.To learn more about strategies for building trading portfolios to help you manage and grow your account over time, visit us at the link below.
There are two ways to build a portfolio. The most common way this is done is by building a portfolio of stocks.
If you take a look at the majority of mutual funds out there, this is the way things are done. If you take a look at what they are doing, they are building portfolios of stocks.
It’s commonly done. And it often leads to average returns. You only have to take a look at what the average mutual fund or the average money manager has done over the past decade.
Picking a portfolio of stocks historically leads to average returns.
There’s a better way to build your portfolio. And this is by building a portfolio of strategies. This means taking multiple strategies and then letting those strategies work in different market environments.
This is done by the best people in the business. It is often done by the largest hedge funds. And when you take a look at some of the names who have done this on a quantified basis, you see a James Simons, for example, at Renaissance Technologies, who is a multi-billionaire who has been on the billionaire’s list for a number of years.
You take a look at individuals like David Shaw at D.E. Shaw & Co. Again, they’ve taken a quantified approach and they use multiple strategies, in some cases hundreds or even thousands of strategies. And this approach often leads to superior returns.
So you can go out there and do what is commonly done. You can go out there and pick stocks. That’s what most people do, that’s what most fund managers do.
Or you can go and build a portfolio of strategies, and that’s what’s done by the best and what often leads to superior returns.
By trading a portfolio of diversified strategies you can often lower the volatility of your (trading) account and you can also potentially increase your returns.
Larry Connors is founder and CEO of TradingMarkets and Connors Research
Party Celebrating Capitalism Has Ended: Fund Manager
CNBC EMEA Head of News
America’s strained relationship between democracy and capitalism is at an inflection point that is likely to favor the politicians over the bankers, according to Richard Maraviglia, a hedge fund manager at Carson Capital in London.
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“The United States could be thought of as a strained marriage of democracy and capitalism,” said Maraviglia in a research note obtained by CNBC.
“The party celebrating capitalism was a great one, but all parties come to an end and so did that one. Whenever one sector of a mixed economy has been ‘in power’ too long, it tends to suffer from hubris,” he said.
Governments in the 1970s acted like the capitalists at the turn of the new millennium. when Wall Street convinced itself that “the more capitalist laissez-fair free-market an economy was, the gentler (non-volatile) a business cycle would be”, according to Maraviglia.
“Capitalism offers the opportunity to get rich, but it also requires the occasional duty of going broke,” he said.
“While socialism offers a relatively calm existence, capitalism presents us with a state of continuous revolution. Creative destruction and capital expenditure booms. Except few were ever allowed to go broke in this cycle. Big government stepped in and took away the business cycle through a series of stimuli or truly unprecedented proportion,” Maraviglia said.
We are now at a point in the battle between democracy and capitalism where the politicians and the business leaders are set for conflict, according to Maraviglia.
“Let’s face it, Washington is a disaster. Political brinkmanship is quite clearly exacerbating what is an already Herculean task. When we look at Merkel, Sarkozy, Obama, and Chavez we see a slow wave of socialism building in the absence of a better solution,” he said.
This had led the likes of Warren Buffett and Howard Schultz, the CEO of Starbucks[SBUX 38.71 
0.96 (+2.54%) 
]to call for an end to political donations to Washington until it gets its act together as the market deals with huge uncertainty over the debt![[cnbc explains]](http://media.cnbc.com/i/CNBC/Sections/News_And_Analysis/_News/_CNBC_EXPLAINS/_IMAGES/CNBC_explains_icon1.gif){kind=small}
crisis.
The policy response from the Federal Reserve to the current crisis is likely to be operation twist followed by a repeat of QE2, the second round of quantitative easing , if we enter a full-on crisis, according to Maraviglia.
“Economies will be cocooned in massive ineffectual, dam-plugging QE,” he said.
“China has engaged in a phenomenal fixed asset investment boom and now it wants to morph its economy into a domestic consumption model. As China daily fixes its yuan higher, it is making millions of Chinese people middle class,” he said.
America Is in a Recession of Confidence: Kleintop
When we last spoke with Jeff Kleintop in late May, I characterized the optimistic Chief Market Strategist at LPL Financial as being “a zig in a world of zags” as he talked about upside in a market that was consumed with pessimism. Today, his counter-trend style splits the economy and the recovery in two.
“Economic data is not actually pointing to recession,” Kleintop says. “But if you look at sentiment indicators, they are weak; consumer and business sentiment is soft.”
On this front, Kleintop has a point.
“The actual data — things we count, actually produce – we’re still seeing some pretty solid numbers there,” he says, using July Durable Goods and Industrial Production reports as examples.
On the flip side, he says a sharp market sell-off following the much weaker then expected report from the Philadelphia Fed Survey released on August 18th, is a good example of the rift. Kleintop says investors mistakenly viewed the regional data as a measure of actual manufacturing production, when in fact it is about manufacturing sentiment.
Ultimately, Kleintop thinks the problem will solve itself. “Confidence will come around and connect to that data,” which he says are coming in a lot better and aren’t “even near recession territory.”
Kleintop’s recession worries don’t come in to play until next year. “I don’t see a negative GDP print in Q3 or Q4. Where we’re at risk of a negative print is somewhere in 2012, but the market is not focused on that today.”
As for the Fed and “Gentle Ben,” they could help the confidence crisis by giving some “more lip service.” But Kleintop has greater confidence that a strong back-to-school season and good jobs data out this Friday will do more to mend to minds of the weary.
Kleintop suggests investors be patient, wait it out, and let the perceived slowdown correct itself. I hate to say it, but I have my doubts that resolution of the power outage or the confidence rut is going to exceed my already low expectations.
Stocks add gains after factory data
NEW YORK (Reuters) – Stocks extended gains on Wednesday after data showed new orders for factory goods rose more than expected in July.
The Dow Jones industrial average (DJI:^DJI – News) gained 126.62 points, or 1.10 percent, to 11,686.57. The Standard & Poor’s 500 Index (^SPX – News) added 14.72 points, or 1.21 percent, to 1,227.64. The Nasdaq Composite Index (Nasdaq:^IXIC – News) rose 26.55 points, or 1.03 percent, to 2,602.66.
Equities earlier rose on continued hopes of more Federal Reserve stimulus for the struggling economy a day after minutes of the latest central bank meeting were published.
The S&P 500 was still on track for its worst month since May 2010. After the United States credit rating was downgraded in early August, the index posted one of its worst weeks since the depths of the financial crisis in 2008.