Wednesday, January 06, 2010

Interest Rates


TBT 60 minute



TBT Daily



TBT Weekly


These charts suggest that interest rates are headed a lot higher.  If so, Long TBT is one way to profit from such a move.  I'll be keeping an eye on TBT Models in my Trend Following Service, focusing mostly on the Daily ModelIf it triggers Long, expect an interim alert.


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4 comments:

Anonymous said...

Harry Markowitz (Portfolio Selection) thought that financial risk is not only necessary but desirable in portfolio management in order to achieve a high rate of return.

Followers of his passive diversified allocation approach often combine stock and bonds etc. for the ying/yang affect on overall volatility.

I always found it interesting how the passive approach does pretty good in the long haul. (Just look at guys like David Swensen at Yale).

Using Allan's system all we need is movement to make money.

Interestingly, the only reason for adding bonds using Allan's ATR approach to a pool of trading vehicles is if the bonds move well when compared to other instruments.

It would be cool to discover a tool that could predict which instruments have the most probability to have the most movement in the future. Something like power rratings but longer term.

Lucky

Holly20 said...

TBT has been on my watch list. I fully agree and would appreciate your system's signal. Thank you!

Mike said...

Lucky,

one approach I've used...although it requires a little Excel® legwork...is to clearly identify the starting point of major uptrends in the market which have occurred in the recent past.

from there....then identify when the trend consolidated, (leveled off).

you now have two dates, (the beginning and end of an uptrend).

from there compile a listing of tradeables you wish to analyze....maybe 20 to 50 different tradeables.

for that uptrend time period....each of these tradeables will exhibit what their individual propensity for price action was.

for example...for the March rally which more or less consolidated on May 1st....Ford stock had a propensity of 300%:

May 1st price of $6/
March 13th price of $2

The "Meredith Whitney" July 13th date...was the start of another rally. Propensity results from March rally could have been used for the Meredith rally.

Not perfect...but there is the gratification of using one's own research.

-Mike

Mike said...

add'l March propensity factors...

EEM....1.5
SPY...1.28

-Mike