June 2018

By Alan Bush
MODERN TRADER explores the effect of a potential trade war on U.S. equity markets. Will it end the bull run or will low interest rates allow U.S. equities to maintain its momentum? Read on. We also attempt to identify the key drivers of active equity hedge funds.
By Daniel P. Collins
Each month in our calendar section we provide an outlook on how the major equity indexes behave in that particular month along with the dates of the important economic reports released that month. We try and dig a little deeper in examining monthly performance to extract trends.
By Michael S. Rulle Jr.
The argument over the value of active versus passive investing is never ending. Here, we make the case for active hedge funds and deliver a passive solution in Target Volatility.
By Walter Zimmermann
MODERN TRADER explores the effect of a potential trade war on U.S. equity markets. Will it end the bull run or will low interest rates allow U.S. equities to maintain its momentum? Read on. We also attempt to identify the key drivers of active equity hedge funds.
By Daniel P. Collins
As cryptocurrencies grow as an asset class, their constituents and potential investors need a benchmark to measure their performance, and also to invest with.
By Daniel P. Collins
President Franklin Roosevelt is famous for the statement, “The only thing we have to fear is fear itself.” It is one of the most repeated presidential quotes. It basically suggests that decisions born of fear often turn out bad, sometimes even disastrous.
By John Rawlins
Quant Cycles (formerly called the Cycle Projection Oscillator) is a technical tool that employs proprietary statistical techniques and complex algorithms to filter multiple cycles from historical data, combines them to obtain cyclical information from price data and then gives a graphical representation of their productive behavior. Other proprietary frequency domain techniques then are employed to obtain the cycles embedded in the price.
By Daniel P. Collins
As we mentioned last month, despite May’s reputation as being a time to sell, other months — June, August and September, in particular — historically produce much worse equity market performance. June is a particularly poor performer, averaging negative performance in both the Dow Jones Industrial Average and the S&P 500.
By Murray A. Ruggiero Jr.
In this first of a series of articles on trading cryptocurrencies, we discuss the basics of crypto and the blockchain technology behind them.
By Dan Keegan
In the 2016 presidential election, Donald Trump’s two main issues were immigration and unfair trade practices. Immigration has continued to be a hot issue since President Trump was inaugurated in January of 2017. The Perdue-Cotton bill arguing on behalf of favoring skilled workers as immigrants led the news for a while.
By Joe Cornell
Shares in iQIYI, a Chinese Netflix-style video streaming service controlled by search giant Baidu Inc., fell during its trading debut on March 29. The Beijing-based iQIYI sold 125 million U.S. depositary shares at $18 per share, which was in the middle of its range. The company raised $2.25 billion in its IPO, which was the largest of the year.
By Andy Waldock
There ’s a picture taking shape in the macroeconomic world that can be seen in the correlated actions of the most significant traders in the currency, interest rate, stock and precious metal markets. We’ll deliver the data and the markets. You can draw your conclusions as to how it all plays out amid a trade war backdrop.
By Matthew Litchfield
The reality of life at a quantitative research shop is that our work has less to do with developing algorithms to predict the future and more with finding new ways to use already proven concepts, especially those contrarian ones found in behavioral finance.
By Yesenia Duran
Volatility trading is the term used to describe trading the velocity of movement in price of an underlying instrument rather than the direction of price. For example, you could trade the value of an equity index, but volatility trading typically means trading the expected velocity of movement.
By Doug Busch
Apple has a big say in where Nasdaq goes as the largest piece of index comprising 7.3%. The technology behemoth is up 11% year-to-date, 25% over the last 12 months and sports a dividend yield of 1.5%. Earnings have been mostly higher with gains in three of the last four quarters. The stock began a sharp rally at the end of April, which pushed it $25 higher (15%) during the following four weeks.
By Joseph Parnes
In the 1968 movie, 2001: A Space Odyssey, the spaceship’s advanced cognitive computer, HAL — which is “foolproof and incapable of error” — suffers a malfunction that leads to the derailment of the mission. International Business Machines Corp. (IBM) has been commonly associated with the naming of HAL (attributable to movie myth), but in reality IBM’s enhanced computer solutions may not be enough to save its mission to drive revenues from its downward trend as a short position.
By John Blank
With mega-cap FANG Tech names like Facebook (FB) blowing up, it might be time to look at smaller cap tech names; in industry niches less known. One niche fits that bill well. The Computer Networking industry space is populated with 10 companies, many of which are small-cap names.
By John Blank
The Electronics/Measuring Instruments industry is staying red hot in a flat market. By late-April, this tech stock group was in the Top 5% (#14 out of 265) of industries Zacks ranks. We counted four upgrades in covering analyst earnings estimates and zero analyst downgrades.
By Daniel P. Collins
In January 2015, WTI crude oil futures broke below its long-term trendline that dated back to the 1998 low of $10.65 per barrel after an eight-month sell-off that took crude from above $100 per barrel to below $50. On the last trading day of January 2015, crude oil rallied close to $3 in the last hour of trading to settle above that long-term trendline. We made a note of it at the time, which seemed to confirm the importance of this level.
By Paul Kuklinski
EOG Resources is the premier onshore U.S. crude oil producer, capable of sustaining many years of very high production growth supported by its exceptional acreage position and industry-leading technical advances. The stock is currently trading at $103 per share (as of May 5) and has an upside target of $209 per share, which is more than double its current price, over the next 12 months assuming a $62 per barrel WTI crude oil price.
By Doug Busch
Whirlpool Corp. (WHR) has continued to make lower lows since failing to take out resistance at $200 on several occasions last summer. WHR is a durable-good laggard; down 10% year-to-date, 16% during the last 12 months and sports a dividend yield of 3%. Earnings momentum is going the right way with back-to-back quarterly gains following quarterly losses of 10.5% (Q3 2017) and 6.3 (Q2 2017).
By Christine Short
Tariffs on imported steel and aluminum were initially ordered by President Trump in March, but subsequently pushed off until June 1. While nothing has been imposed yet, tariffs were top-of-mind for U.S. corporations during first-quarter earnings calls.
By Matt Weller
When it comes to the forex market, the New Zealand dollar punches well above its weight. New Zealand famously has a larger population of sheep than people, and the country’s GDP ranked just 70th among individual countries last year (behind powerhouses such as Greece, Uzbekistan and Ecuador).