Seeking Alpha

James Brodie

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  • AUDCAD: Time To Go Short [View article]
    OwenB,
    the Bank of Canada base rate (overnight lending rate) has been unchanged at 1% since September 2010, but the market is now pricing a 25 basis point hike in rates by year end (priced in the Overnight Index Swaps market).
    Jan 10 08:01 PM | Likes Like |Link to Comment
  • Japanese Yen Is Massively Oversold But Which Currency Pair Offers The Best Value? [View article]
    Glenngie,
    the JPY is massively over sold on the daily and weekly charts, at levels we've not seen for 5 years. On the interest rate differential it looks like fair value against the 2yr IRS is now around 63.80 level, BUT we need to see a clear confirmation from the weekly charts that the market has rolled over before entering a short with some conviction.
    Jan 4 01:18 AM | Likes Like |Link to Comment
  • Japanese Yen Is Massively Oversold But Which Currency Pair Offers The Best Value? [View article]
    Domu,

    yes my trade is a 2-3 month time horizon. I totally agree long term USD/JPY trades higher. I expect it to bottom around 79-80 and then the long term trade begins, add to longs when it breaks above the March 2012 highs of 84.19. This will be based on noise in 2013 over when the first FED rate moves occur, Japanese rates are going no where for a long time. Also being long USD/JPY you are on the right side of any MOF intervention.
    Dec 6 10:54 PM | Likes Like |Link to Comment
  • EUR/USD: A Perfect Short, Whilst Ignoring The Murky Fundamentals [View article]
    First of all statistically head and shoulders patterns only actually confirm reversal patterns about 55% of the time. The rest of the time the neckline (which is also an important support/resistance line) actually holds the prevailing trend.
    Secondly, the rising support line in the DXY actually forms the base of a perfect trend channel which implies a stronger dollar and a mid range level of about 83.00.
    Until such levels are broken the longer term trend remains in tact and actually makes the trade more appealing as shorting the EUR/USD at current levels leaves the option to leave a very close stop loss, which increases the risk reward pay off.
    While interest rates are not moving the rate differentials will just continue to imply the currency is incorrectly priced, and should be trading nearer to the 1.2000 level.
    The headline is of course attention seeking !
    Dec 3 01:54 AM | Likes Like |Link to Comment
  • How About Alpha AND Diversification? [View article]
    Villi, Varan,
    The chart since 2000 of NewEdge CTA Index versus S&P is based on program/systematic style hedge funds and Commodity trading advisors, such as Winton and Bluetrend, two of the largest hedge funds in Europe. Others are Fx Concepts, Kaiser, Sherpa etc etc. ETNs and ETFs are barely into such strategies but the above examples are some of the first to break the mould. They trade with the rising trend but move to cash products as the trend starts to move lower. Relatively crude compared to some of the hedge fund strategies but they do offer an alternatives to long only and long/"short" equity strategies.
    Oct 25 10:29 AM | Likes Like |Link to Comment
  • Bernanke Faces Exhausted Equities And Bearish Signals In Other 'Risk' Markets [View article]
    Lyeonn, I agree and there are another 2 HUGE warning signals. The DeMark WEEKLY Sequential indicator (my favourite technical indicator, and the one I would take to a deserted island !) signaled buying exhaustion 2 weeks ago. It has incredible ability to pick turning points of intermediate trends (Dow Theory) and has now been further supported by the fact that the WEEKLY MACD (moving average convergence divergence) indicator has just crossed over to generate a fresh sell signal. With our back testing and trading at The Sherpa Funds we include these indicators in our models (and standard deviations, Boll Bands), they have a consistent record and they are much stronger signals on the weekly charts than the daily. It makes a more compelling trade when more of the indicators line up like stars !
    Aug 29 01:38 AM | 1 Like Like |Link to Comment
  • Bernanke Faces Exhausted Equities And Bearish Signals In Other 'Risk' Markets [View article]
    Stanley, Lyeonn, even the perma bulls that I speak to are now much more defensive, they have also realised we are now at an important junction with too many short-term risks to over-look. The next few weeks will be interesting.
    With my technical analysts hat on (Chartered Market Technician) there are another 2 HUGE warning signals. The DeMark WEEKLY Sequential indicator (my favourite technical indicator, and the one I would take to a deserted island !) signaled buying exhaustion 2 weeks ago. It has incredible ability to pick turning points of intermediate trends (Dow Theory) and has now been further supported by the fact that the WEEKLY MACD (moving average convergence divergence) indicator has just crossed over to generate a fresh sell signal. With our back testing and trading at The Sherpa Funds we include these indicators in our models, they have a consistent record and they are much stronger signals on the weekly charts than the daily.
    One other fear I have is that because the asset markets are now so closely correlated ( http://seekingalpha.co... ), when the sell off does come it will be exaggerated as so many participants across a broad range of markets rush for the few exits.
    Aug 29 01:35 AM | 1 Like Like |Link to Comment
  • Find Alpha And Diversify Your Portfolio As Asset Correlations Converge To 1 [View article]
    Thank you. Unfortunately I don't know of an ETF that perfectly tracks the NewEdge CTA Index, i'm not sure if any other readers can suggest one ?
    An alternative comparison would be specific hedge funds that program trade, like ourselves (http://bit.ly/NVxLLv), Winton and Bluetrend, that produce low risk, consistent returns, AND with the ability to produce strong profits when asset prices are falling.
    Aug 27 01:55 AM | Likes Like |Link to Comment
  • Australian Dollar Overvalued And Over-Correlated To Asset Markets [View article]
    I agree it "looks the best of a bad lot" as it still has some interest rate premium. But what i'm trying to highlight though is that it's become a beta trade along with the 5 main asset classes, there's very little diversification at all. And when looking at it on some fundamental and technical charts it's definitely looking over-bought in the medium and long term. So if/when "risk" does see a pull back the Australian dollar will be hit comparatively harder.
    Jul 2 12:57 AM | 1 Like Like |Link to Comment
  • Australian Dollar Overvalued And Over-Correlated To Asset Markets [View article]
    If you don't like buying the USD, then NZD as per the above chart is an option, but another stand out is buying JPY. The interest rate differentials which have correlated so consistently over time have also broken down since late 2011 and now suggest AUDJPY closer to 63.00 rather than the current 79.90 level. This would also be the preferred trade if you fear further contagion from Europe's sovereign debt crisis or the continued slowdown in global growth.
    If however you are simply looking for diversification from asset markets in general, with respect to the first chart, then the stand out investment appears to be in CTA (Commodity Trading Advisors), or similar products, where trend following strategies have the ability to short markets as easily as being long. This would hedge portfolios biased to the long side; equities, real estate etc, but also add value if markets can rally on any fiscal/monetary/Europe surprises.
    Jun 26 11:09 PM | Likes Like |Link to Comment
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