Posts Tagged ‘Quants’

Quants Are Making It Impossible For The Individual Trader

Quants Are Making It Impossible For The Individual Trader

By Courtney Comstock, courtesy of Clusterstock

The author of the new book, The Quants, talks on Yahoo Finance about the quantitative machine-based trading that has fully taken over Wall Street.

Scott Patterson says that there has been a huge rise in the number of quant traders on Wall Street and they make it really hard for the individual to compete on a level playing field.

"[The individual trader] has no idea the forces that are arrayed against him," says Patterson.

As he notes, Ren-Tec alone has 90 Ph.D’s figuring out market patterns. Good luck going against them.

 


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Kass: The Quant Bubble

Kass: The Quant Bubble

Courtesy of Jan-Martin Feddersen at Immobilienblasen

A must read…… Pflichtlektüre……
 

"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing."

Chuck Prince, former chairman and CEO of Citigroup (told to the Financial Times on July 10, 2007).

Kass: The Quant Bubble TSC ( H/T Anti Lemming )

A portion of the sharp rise in several asset classes over the past few months could be the dominance of quant funds that worship at the altar of price momentum (and the self-fulfilling prophecy of the fund flows that follow the price momentum induced by the quants!).

By some estimates, this price-momentum-based quant trading now has doubled in significance since early in the year, to more than two-thirds of the average day’s trading

>I doubt that this figure is correct, but it is verry telling that combined with High Frenquency Trading the "Quants" are the main market force dominating trading…… Doesn´t give me much comfort that the recent gains are "sustainable" …… Especially after one of the biggest Bear Market Rallies ever….. Thank god the retail investor this time is smarter than the so called "smart money" ( 13th Straight Week Of Domestic Equity Fund Outflows As Market Rips 11% Over Same Period ) BRAVO ;-)

Growth of algo trading - Thomson Reuters
 

Trades initiated by these funds are insensitive to an underemployment rate approaching 18%, signs of an unsteady recovery in housing, the prospects for higher marginal tax rates and how we are going to finance our budget deficit, which hurdles ever higher.

If you don’t believe me about the growing quant fund influence, speak to any prominent institutional trader or salesman: They will tell you that their business with plain vanilla institutions is weak and that the quant funds are the ever growing whales of trading.

The pattern is all-too familiar as a new marginal buyer of an asset class dominates the market until they don’t.

Here is an anecdote that underscores the changing landscape and is reminiscent of other sectors hiring at tops. (To refresh your memory, this occurred several years ago in private equity and was followed by a sharp cyclical


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Biotech/COVID-19

Here's where (and how) you are most likely to catch COVID - new study

 

Here’s where (and how) you are most likely to catch COVID – new study

VGstockstudio/Shutterstock

Courtesy of Trish Greenhalgh, University of Oxford; Jose-Luis Jimenez, University of Colorado Boulder; Shelly Miller, University of Col...



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Zero Hedge

Will The Market Flip Green This Week? Here Are The 15 Things On Goldman's Checklist

Courtesy of ZeroHedge View original post here.

Goldman's flow trader Scott Rubner called the year-end meltup and Santa Rally with perfect accuracy, although his call for a continuation of the meltup into January and the new year has so far proven painfully wrong. And with sentiment imploding over the past three weeks, turning from euphoric to cataclysmic in just a matter of days, it is hardly surpris...



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ValueWalk

These Are the Ten Best Performing Options Trading Funds

By Aman Jain. Originally published at ValueWalk.

Mutual Funds typically invest in stocks and fixed-income securities. However, there are funds that, along with investing in such securities, may also invest in derivatives contracts such as options and futures. Such types of investing allow funds to hedge their risk, and for investors, it helps them to diversify their portfolios. Let’s take a look at the ten best performing options trading funds.

Q4 2021 hedge fund letters, conferences and more

Ten Best Performing Options Trading Funds

We have referred to the last one-year return numbers (from ...



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Chart School

Bitcoin Swings Down to Support

Courtesy of Read the Ticker

Come on! Seriously do you think a 400% rally for Bitcoin was going to be given to the public easily. Without any pain! Come on muppets!



The uniformed (public) buy when price is rising or breaking new highs, the informed buy when price is falling or breaking lows.



The informed have to do it this way as they are large volume players and the only way they can buy large volume is to create chaos. The chaos brings to the market the weak holders and a forced sell. Price is moved to where the volume can be accumulated, in a bull trend that is down to critical support.



Of course if price is in a true bull market the 'chaos' created should not break critical long term trend signals, ...



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Kimble Charting Solutions

Nasdaq Weakness Has Bears Circling Tech Stocks!

Courtesy of Chris Kimble

One theme over the past several months has been tech stock’s under-performance. And 2022 seems to be amplifying this theme as we kick off the new year.

Today’s chart focus is on the ratio of the Nasdaq Composite to the S&P 500 Index. We have shared this ratio a few times recently as the price pattern has become a concern.

As you can see in the chart, there’s a potential that the ratio double topped last year at the 2000 highs. And weakness this month has it attempting to break dual support at...



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Politics

What Supreme Court's block of vaccine mandate for large businesses will mean for public health: 4 questions answered

 

What Supreme Court’s block of vaccine mandate for large businesses will mean for public health: 4 questions answered

New York City’s vaccine mandates are unaffected by the court ruling. AP Photo/Mary Altaffer

Courtesy of Debbie Kaminer, Baruch College, CUNY

The U.S. Supreme Court on Jan. 13, 2022, blocke...



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Digital Currencies

The metaverse is money and crypto is king - why you'll be on a blockchain when you're hopping

 

The metaverse is money and crypto is king – why you’ll be on a blockchain when you’re virtual-world hopping

In the metaverse, your avatar, the clothes it wears and the things it carries belong to you thanks to blockchain. Duncan Rawlinson - Duncan.co/Flickr, CC BY-NC

Courtesy of Rabindra Ratan, Michigan State University and Dar Meshi, Michigan State University ...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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