Managed futures funds are run by Commodity Trading Advisers that use predominantly use trend following trading strategies. The charts of the Barclay and Newedge CTA indices are predicting a downturn in equities in the near term. After the Barclay CTA Index traded in a range in 1999-2000 and 2006-2007, the Standard & Poor's 500 Index collapsed. There was another period in 2009-2010 and the market has been trending down. Looking at the daily Newedge CTA Index chart, there was a recent drop of 5%. This is presaging a drop in equities.
The source for this article written by Thomas Lott, President of Potomac Portfolios, with charts, can be found here.
U were correct, friend.
ReplyDeleteThe S&P500 index went down 19.5% 37 days after you posted this article.