MEMBER COMMENT

 

Metals and miners are consolidating. I’m still waiting for prices to break in either direction.

Below is a member comment I wanted to share.

Comment: Thank you SO MUCH for your report ending comments. Finally a highly educated and experienced investment professional clearly confirmed what I had surmised the past 18-months. Many professional traders have quit, and dozens of hedge funds closed, but never a useful “obituary” other than saying “market is untradeable”.

Your comments confirm my assertion that either I was going crazy or something had dramatically changed in the predictive qualities of cycles/technical analysis. Things really are different now, so maybe I was not losing my skills or my mind!!

Response: My pleasure. Algo’s definitely make trading more difficult. Stanly Drunkenmiller was one of the best fund managers for 30-years. During his tenure, he averaged 30% annual returns. He said computers and algorithms have made trading a nightmare and that his annual returns have plummeted. He retired a few years back, but his guy was in the zone and couldn’t miss for 3-decades. He didn’t change – the markets did.

So what do we do? I need to spend some time to retool my indicators/signals to account for computer meddling. To me, it looks like Algo’s intentionally break support or trendlines to “paint the tape” as an established breakout or breakdown. Then, 1 to 3-days later they reverse heavily the opposite direction and catch everyone off-balance. Going forward, we need to understand how they work and set parameters for breakouts, i.e., price needs to hold above X-value for X-trading days before over-committing.

-AG