Posts by Niels Kaastrup-Larsen

So needless to say, it was a challenging month for trend followers.

But lets just be clear about one thing…those shorter-term strategies that claim that trend following is too crowded and too slow and does not deliver enough convexity…did not do much better than their trend following cousins…and have certainly not delivered nearly the same return so far this year.

While Hurricane Dorian was building up to severe intensity before making landfall in the Bahamas…August also turned out to be a Category 4 or 5 when it comes to the intensity of strong trends and performance for the CTA industry.

Having gathered strength in the first 7th month of 2019, the momentum in many markets was further unleashed during the late summer month, a month that historically has proven to be full of surprises for the markets.

The hot month of July was not as quiet as you would expect, when lots of investors put on their “email auto responder” saying, “…I’ll be out of the office with limited access to email…” – clearly they did have access to their trading terminals as market prices continued to move in a trend friendly and divergent fashion.

US Stocks had their strongest June since 1955 and recorded their highest ever monthly close, leaving investors in the S&P500 17% better off than at the end of 2018, marking the best first half in more than two decades.

Fears for the economy have stoked government bonds as investors fret slowing growth and rock-bottom inflation. Treasuries returned just over 5% in the first half as they piled in. In the process more of the yield curve inverted, and the world’s pool of negative yielding debt swelled to a new record.

Yet as bonds screamed recession, stocks defied that, too.

A perfect set-up for the month of May…stocks at their most recent highs, moderate growth, a dovish FED, volatility back to it’s lows and confidence in the tariff war ending soon…was quickly crushed by new tweets and rhetoric that caught the bulls on the wrong foot.

The month of May left equity investors bruised whilst bond investors enjoyed and unforgiving rally during another flight to “safety” environment and reminded us all of the old saying “Sell in May…and go away”.

Global Marco is back with a vengeance…which could lead to big trends ahead.