Monthly market essays from the perspective of a multi-disciplined trader with 30 years of experience.

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Somewhere between Japan and Venezuela

All we seem to be hearing about these days is the possibility that a super-cycle for higher commodity prices and an outbreak of inflation is upon us.


If nothing else, the so-named 'Reddit Rebellion' has peeled back a thin veneer covering a host of important issues for capital markets, and The Rebellion may well give rise to another unexpected household word soon.

Our Base Assumption

Our base assumption is that there will always be market participants out there who are smarter than us, have better information and a lot more money.

Know Thyself

It is hard to not get just a little cautiously optimistic when our Totem Trend Index moves into the Top Quartile of more than 5,000 daily observations where it lives for only 20% of the time.

CTA Returns in Q4 of General Election Years

Revisiting a theory that Trend trading strategies tend to outperform during the 4th quarter of General Election years in comparison to other Non-Election years.

Dispersion Part 2: Trading, Fast and Slow

Trend trading managers probably have more in common with each other then they would like to admit. If true, why the exceptionally wide dispersion of returns reported through the first half of this year? We explore some of the inputs and strategies used by managers which might just help to explain why.

Dispersion Part 1: Multiple Fronts

Everywhere we look these days we continue to see examples of widespread dispersion of prices, or large divergence from average. In this 2-part series we investigate why manager performance in the CTA space has been so widely scattered through the first half of this year.

Now Comes the Hard Part

Is there an industry out there that has not been affected by our nation's biggest challenge since WWII? Will our economy spin out of control into Great Depression II, or respond with vigor and vengeance? Perhaps something in-between? Opportunities exist everywhere right now and will be creating winners and losers. Nobody knows what comes next...

Maslow's Hierarchy of Needs

How you manage yourself during a panic tells you a lot about your character. The same might be said to be true for your investments.

Mad Fold-In

It took a global pandemic to call the Central Banks out on their excesses, and all we got was this lousy T-shirt.

Orographic Precipitation

There is no such thing as bad weather, just bad clothing. The windward and leeward sides of a mountain look a lot different from each other.

American Pastime ( 3 of 3 )

A 3 part serial essay on the state of markets as this decade draws to a close.

American Pastime ( 2 of 3 )

A 3 part serial essay on the state of markets as this decade draws to a close.

American Pastime ( 1 of 3 )

A 3 part serial essay on the state of markets as this decade draws to a close.

Inflection Points and Defining the Prevailing Market Regime

Following an unusually sharp collapse during the past month, our measure of market Trend activity has hit a new multi-year low. This may represent a good opportunity to assess your portfolio and risk profile.

Uncomfortable Equilibrium

Our baseline trend strategy is currently flat in the S&P 500. This will not always be the case, and as a shrewd investor you should be ready for the next move when it becomes clear.

S&P 500 and the 2.62 Fibonacci Projection

The equity market may well be at a key level which puts it at risk.

The Role of 72

Sock it away, and let compound interest do its thing, they said...

Oops, they did it again

Once again, the launch of a new futures contract on the CME signals trouble for the underlying market, this time in the micro space.

Changes in the Game

One of my mentors has seen 7 distinct cycles in 50 years of trading experience, and reminds me that I am merely a member of a herd, that capital seeks quality and safety, and to always be on the lookout for changes in the game.


The addition of just a small amount of "Deep Purple" concentrate dominates the bottle of wine. SImilarly, the cap-weighted, float-adjusted market indices remain at the mercy of just a small portion of the 505 issues in the S&P 500 basket. Be mindful of what you are drinking.

Roll Tack

Tell me again, just how does a yacht racing technique apply to capital markets?

Spark Joy

It's a simple question we ask: are our positions bringing us joy?

Both a Strength and a Curse

Have you been blindly following along?


In the Old Testament, after 7 cycles of 7 years, debts were forgiven and slaves freed. We imagine this process promoted a natural cleansing cycle.

The Power of Not

Markets tend to take the stairs up and the elevator down.

Just as tasty; half the calories

Efficient Frontier Analysis of the SP500 and Totem Orca Program

Right Church, Wrong Pew

Trend Following is not dead; it has just been hiding out in illiquid, unregulated and exotic places while Central Banks have their way.

All about the Denominator

Apple hits the $1T Market-Cap level and 42% of its price gains since 2013 are from debt-fueled buybacks.

The Struggle is Real

You do not need to hold a PhD in Mathematics to see that something is changing.

Momentum Ignitors

In fiat currencies, there is no such thing as "fundamentals".

False Idols

Accountability is at the heart of democracy.

Trade, Cryptos, Privacy and the Cost of Capital

Currently, many issues weigh on Capital Markets, increasing the possibility that the prevailing bias is no longer supporting the prevailing trend.

Small Potatoes

Crowded trades were forced to exit in February revealing who has been leaning heavily on the kindness of central-bank strangers.

Above All Else, Do No Harm

Avoiding the big down moves may be more important than missing out on the big up moves.

Risk Mitigation with a 70/30 Investment

Risk mitigation for your traditional stock / bond / real-estate portfolio by adding the Pure Trend Zero-Equity Orca Program.

8.7 Years and Counting

A traditional 60/40 stock/bond portfolio has not endured without a 10% drawdown for as long a period as the period immediately before the Great Depression.

The Transfer of Risk

With the launch of the FANG+ futures this week and BitCoin in the coming quarter, it is maybe worth taking a quick stroll down memory lane.

An online multi-user game played by my kid serves as an example of market behaviour and available strategies used by participants of different sizes.

Supertankers cut their engines 15 miles from shore

Supertankers will cut their engines 15 miles from shore. They are so large and have so much stored momentum that it takes 20 minutes for them to stop, and they require further outside assistance to maneuver when docking. Debt-fueled Capital Markets may be subject to similar forces.

Not Mutually Exclusive

July reinforced the point that, while our trend approach tends to work well during periods of equity market stress, our uncorrelated strategies don't rely upon such conditions.

The further away we get, the worse it will look

At least for now, the visit to the important technical level in the SP500 must be considered an abject failure. But, calling market tops - especially in the equities - is a difficult business.

They don't ring a bell at the top

A handful of stocks are recently accounting for the bulk of the gains in the equity indices as investors have eschewed active investing for that of really inexpensive passive investing. Just be very careful around these current important technical levels. Always have a plan just in case things don't work out as you might have hoped.

The First Saturday in May

How I won $18k on a $144 bet. Read more about it here

It wasn't raining when Noah built his ark

Although Past Performance is No Indication of Future Results, our program's return profile tends to thrive during Stock Market Declines and periods of high market volatility, offering sophisticated investors a cost-effective hedge for their traditional stock/bond/real estate portfolios.

The Last Mile Question

Using the 1980 low and the Y2K high, the SP500 respected the 50% and 61.8% retracements absolutely. As we get to within striking distance of the accompanying 1.618 projection, how will equity markets behave around this key level amidst relentless fervor and ongoing shift to passive index?

Regime Changes

Since October, our Trend Index went from horrible, to terrific, and back to horrible.  This price action will likely be reflected in our peer group returns for Jan, and could change on "Any Given 140 Characters".

Time To Recovery

No sooner had we discussed how "good" the invisible hand has been at staving off sharp equity index declines and the team from JP Morgan comes up with this gem of a chart.

Make Trading Great Again

Arguably the largest upset in American political history has unleashed volatility across the board as global market participants begin guessing as to what new policies and actions affecting trade and markets are coming our way.

Try not to suck

108 years later the Law of Large Numbers finally catches up for the Cubs, and Hell Freezes Over. What other surprises are headed our way?

270 to Win

In more than 4,250 observations since the year 2000, our Trend Index has only been as low as 23 on 150 days. This rare occurrence is often (but not always) followed by large profitable moves.

The Confidence Game

For some time now our position has been that the only thing that can really get rates going higher would be a collapse in confidence. Are we close to crossing some threshold?

We see what we want

In this age of digital consumption, it takes extra effort to fight off the cognitive biases that investors and traders are faced with.

The Price of Liquidity

Any "thing" is worth whatever someone is willing to pay for it.

Bring on Q4

The 4th quarter of US general election years tends to be very good for trend trading (or convex) strategies. We explore this idea using data from a bunch of names from the 90's. Are you ready?

Anscombe's Quartet

Daily mentions of "correlation" compel us to remind you that few things can replace experience and you might just be getting what you pay for.

I am not uncertain

We are finding out about lots of interesting things that have been happening behind closed doors and we are not privy to. But when has that ever not been the case? Price is all that matters.

Jokes are rarely as funny the second time around

Fresh year lows in the equity indices are yet again matched by a massive short-squeeze as Jamie Dimon does his best J Pierpont Morgan impression and makes a widely-advertised purchase of JPM in his personal account.

You've been warned

"So goes January, so goes the year" is the old trading axiom, as if anything old matters anymore. On Groundhog Day, we are left once again wondering about the $4 Trillion in passive long index investments out there as discussed in our Oct '14 essay.

Yellen Does, Draghi Can't

After getting spooked in August, the Fed finally pulled the trigger with a rate hike ending an unprecedented era in which your old textbooks are no longer valid. Draghi, on the other hand, was quite certain that he could mount an aggressive easing campaign and miscalculated the required votes.

Complexity Theory

The Fed has a notoriously bad track record of forecasting because their models are flawed. Behavioral Economics and Complexity Theory suggest that even with perfect knowledge, you cannot predict outcomes.

The Empire Strikes Back

Does 2015 feel a lot like 1998 to anyone else out there other than me? (Except of course that Fed Funds are at zero instead of 5.50% and the Keynesian bullet has been spent...)

Land of Confusion

Some pundits have been calling for rate hikes off the emergency zero bound since 2011. After carefully and finally setting the stage for rate 'lift off', the Yellen Fed failed to pull the trigger.

One Man's "Crash" is Another Man's "Correction"

Another currency peg abandoned. Catastrophic Cascading Capitulation as "Carry Trades" and "Risk" were swiftly unwound during the summer break of 2015.


Remember the Asian Crisis in '97/'98? As the 2009 commodity lows are being challenged, just how deep can these prices go? Perspective is everything.

So You Think You Can Dance?

Collapsing Chinese equities markets prompt Central Bank intervention, and Greek referendum opens the door to reversing the 'irreversible'.

Non-Confirmation and the "Move with No Name"

Some mixed-signals coming from the equities indices and a difficult period in commodities as we vacillate around the 2009 low.

Every 3 Billion Years or so

These "100 Year floods" seem to be happening rather frequently.

When the Fed taps the brakes, someone always goes thru...

Just ask Bob Citron and Orange County.

What's good for AAPL is good for the country

A handful of stocks control the market.

That first step is a doozy...

The Swiss shock by abandoning their currency peg.

Disciplined. Efficient. Gritty.

80% of success is showing up.

Commodity Crumple (the Fib within the Fib)

The CRB gaps lower and opens the door to the possibility of revisiting the 2009 lows.

Towards the Sound of Chaos

Increasingly crowded Passive Index Investing and "Buy The Dip" mentality may wish to consider that Central Bank intervention might not always be there to save you.

The Kiss

Our VAMI meets that of the SP500. But, we got there in incredibly different ways.

Chutes and Ladders

Markets tend to go down faster than they go up.

Winter is Coming

Brazil 1:7 Germany Nobody predicted that outcome. Trend Following has no forecasting bias. Do you?

Ab Porto (Opportunity)

Markets are Maximally Perverse and work in unpredictable ways. At some point volatility will return. Have CTA strategies and investors passed Capitulation and Despondency into mere Depression?