trader717

Risk Management in Trending Markets

Everyone else has already said, so I might as well too. Great article. Really should be used as a basis for how articles should be written on this site. Very informative and unbiased. I agree with much of what you have to say.

Dow's Next Move: A Technical and Fundamental Look

I know of the 5-wave cycles, but I have also never heard of the 7-wave cycles. If you do notice, the 5th wave up marked about the top, and then the Dow proceeded to trade in a range with a subsequent break below to form the first multi-month down leg A which bottomed in March. It was a good article to read. Although, you didn't provide too much into the fundamental aspect going on in the markets. You mentioned earnings, so a forward P/E of the Dow companies compared with historical forward P/E's can be important. Fundamentally, it is also not just our economy that is in a recession, but now European economies. Therefore, even companies with high international sales that have been holding the markets up as much as they could are going to see earnings deterioration.

In the end, yes a rally is highly probable and would be healthy, but the trend remains down and both technically and fundamentally, the markets are bearish. (by the way for all those technical analysis haters out there, I believe technicals have been more accurate recently as we had many analysts from top banks like Morgan Stanley and UBS predicting S&P over 1,700, when the technicals were showing a possible double top and a subsequent breakdown, I strongly believe in both technicals and fundamentals, but just wanted to remind the haters that both can work)

Another Hedge Fund Bites the Dust

why does it seem that those who complain most about hedge fund losses are those who do not invest in them? notsosmart is right, these institutions or individuals who invest in these funds know what they are getting into. Institutions do not invest 100% of their fund into hedge funds, rather maybe 20-30%, give or take for each specific one. That represents the more risky and speculative portion of their total portfolios.

Not to mention Devaney's half a billion is miniscule to our entire financial economy. That does not even dent the U.S.'s financial asset base. Why not talk about other funds as well, like Paulson & Co. generating 600% for some funds, which made billions for investors.

Volatility in the markets is needed. Markets trend, both up and down, bubbles are formed and pop. This is needed for our financial system to work. If volatile trends were not created in both directions, everyone could just put all their money into the market index, because it will go straight up forever in a straight line. CD's, money markets, savings accounts, would all be eliminated.