December 2015 Results

December continued the trend of rewarding short-term traders while punishing swing traders and buy-and-hold investors.  We finished the month up 19.90%, one of our best months of the year.  While, SPX closed with its 6th monthly loss of the year at -1.63%.

2015 Monthly ResultsI ended November’s monthly review with the warning:

…December will be full of more twists and turns, given the highly-anticipated FOMC rate decision.  The ECB and BoJ are also expected to stir things up.  I will continue to look for opportunities for larger, longer-term swing trades.  But, I suspect scalping will generate better returns with less risk…

Truer words were never written.  Of December’s 22 sessions, 15 featured gaps at the open.  Thirteen of those 15 were a reversal of the prevailing trend into the previous close. And 17 of the 22 produced daily ranges of 20+ points!  It was a nightmare for swing trading, but a dream for day trading.

2016-01-04 SPY 60 1800 gapsWhat’s more, 13 of the 22 sessions criss-crossed the 200-day moving average at some point during the day.  If that doesn’t impress you, consider that prior to July 7, 2015, the S&P 500 had only dipped below its SMA200 once since Nov 2012 (the October 2014 lows.)2016-01-04 SPX daily MAsPerhaps most surprising of all was the way markets reacted to the most consistently bullish driver of this never-ending rally: central bank utterances.  The ECB, FOMC and BoJ’s monetary policy pronouncements were each followed by sharp sell-offs (after the requisite post-press conference rally, of course.)

Could it be that the steady drip, drip, drip of Central Bank algo-driven gains are a thing of the past?  Based on the past few months, it certainly seems so.  Countless high-profile hedge funds have announced their closure in the past month.  I suspect at least a few of these funds were leveraged, long-only funds that hedged in name only.

It’s been a fabulous environment for traders — though it has required an enormous amount of work to stay abreast of the daily swings and, more importantly, avoid being clobbered by the frequent, massive head fakes.

Screen Shot 2016-01-05 at 5.42.43 AMIf you kept up with every one of the long/short calls over the course of the month, you did better than most.  With all that volatility, it wasn’t unusual to finish posting one position change and find that SPX had just reached the next target, necessitating another update.  Sometimes this helped members’ performance, as my initial call was premature; but, sometimes it hurt.

As a result, I’m in the process of setting up a private Twitter feed that will get messages out faster for those who actively trade.  I’ll post signup instructions once it’s up and running. It won’t be an instantaneous transfer from my brain into your trade platform — but, trust me, that’s a good thing!

In the meantime, we’ll say good-bye to a fabulous 2015.  For someone who nailed every single entry and every exit as I posted them, a $10,000 stake would have grown to $64,042.49 (compounded monthly.)

To celebrate, I’m offering Charter Annual Memberships at $640.42.  All you monthly, quarterly and semi-annual members who were waiting for the best deal of the year — this is it!  I’ll have it posted in the next hour or so.  To sign up, CLICK HERE.

 

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