A year ago we asked 16 industry experts and MODERN TRADER analysts to provide their forecast for various market sectors in 2017. More than half had a positive outlook on the S&P 500, but only Dan Gramza predicted that the S&P would gain more than 15%. Alan Bush, Joe Cornell, Carl Larry and Tim Melvin all predicted the broad market would gain more than 10% in 2017.
Artificial Swarm Intelligence (Swarm AI) is a combination of real-time human input and artificial intelligence algorithms enabling an emergent intelligence to form that can provide optimized insights. Modeled after swarms in nature, the process enables human groups to converge upon optimized solutions by combining their knowledge, wisdom, insights, and intuitions using AI algorithms
Franklin, if alive in today’s political environment, would feel vindicated. Alongside death and taxes, he could have listed one more invariant feature of our world: Year-end prophesy. This refers to, of course, our ritual forecasting of the Dow Jones Industrial Average performance.
A year ago MODERN TRADER tabbed cybersecurity as the investment theme of 2017. Contributors Timothy Summers and Michael Robinson highlighted the reasons and provided a short list of stocks to look at. While every stock mentioned was not a home run, Robinson’s picks of Nvidia (NVDA) and Raytheon (RTN) soared 65% and 40% over the 11 months to follow and the broad sector as represented by the ETFMG Prime Cyber Security ETF (HACK) gained more than 18%.
Bitcoin began in 2017 with a value below $1,000, by early December it surpassed $17,500. Ronnie Moas put out a buy recommendation in July when bitcoin was priced at $2,570, he recently raised his 2018 projection from $20,000 to $28,000. Here’s why.
Global markets have been on a tear, hitting fresh highs supported by low rates and synchronized global growth. Emerging markets have benefitted from record inflows to rise strongly this year, but political risk seems to be rising even as volatility is falling (see “Emerging markets soar,” below).
While every year holds its own distinct global risks and opportunities, the world appears particularly vulnerable as it enters 2018. The form Brexit will take is still unclear, there are new tensions in the Middle East to go along with the eternal tensions we have grown accustomed to, Europe threatens to disintegrate in multiple secession efforts similar to Catalonia, two unstable leaders continue to sabre rattle threatening war on the Korean peninsula and the world’s stable leader, the United States, doesn’t seem so stable all of a sudden.
We look to financial sector stocks as a market leader. There has never been a bull market in U.S. stocks without participation from the banks. They don’t necessarily need to be leading but they do need to participate.
Cryptocurrency trading is being introduced to the broader investing community, and there are many unique attributes traders will need to learn.
Managed futures have variously been defined as an eclectic mix of investment strategies, a hedge fund category, and a separate asset class. People outside of the industry tend to see them as a risky investment. Regardless of perspective, managed futures exhibit unique properties that make these strategies an attractive investment vehicle.
Technology & Trading
Last month we discussed the complexity required in testing and optimizing Arima-Garch trading models (see “Arima-Garch Out of the Lab, Into Trading,” Modern Trader, January 2018). We backtested our Arima-Garch hybrid model discussed last month to the S&P 500. Here is how it did.
With Brazilian “Flowering” season wrapping up, the coffee market braces for record production.
Every year that MODERN TRADER approaches our forecasting issue we confront the conflict between a healthy skepticism of the market forecasting industry and the need to provide readers with actionable information on markets, and finding the best sources to provide it.
In 2017, ads for Airborne Wireless Network appeared in Forbes, on Bloomberg, CNBC, CNN and now in MODERN TRADER. We wanted to get a better idea of the company’s principal business strategy of developing and licensing the first fully meshed, high-speed broadband network by linking aircraft in flight. In essence, an airborne wireless network.
With a market cap of $2.6 billion, Ensco (ESV) is a leading marine driller with a fleet of 63 rigs, which includes 12 ultra-deepwater drillships. Ensco’s stock price is near its cyclical low. It has a 12-month upside target of $7 per share (+12%) assuming its seven-year average 6.3x cash flow multiple on depressed 2018 estimated cash flow of $1.07 per share.
Crude oil and coffee set commercial trader net position records in November. WTI crude oil set records in both net and total position sizes. The WTI market has remained under $60 per barrel since November of 2015. May of 2016 saw the Baker Hughes rig count bottom at 318. There were nearly 1,500 rigs up and running in Q4 of 2015 when oil prices began falling precipitously. Currently, about 750 rigs are operating. This metric has been steady since early May of 2017.
Stamps.com Inc., the Internet-based mailing and shipping solution provider is sending short signals this holiday season. STMP offers mailing and shipping solutions through the U. S. Postal Service under the Stamps.com and Endicia brands. STMP, formally known as StampMaster, Inc. was founded in 1996 and serves individuals, large businesses, and warehouses.
There are no two ways about it: 2017 was a brutal year for U.S. dollar bulls. By mid-December, the world’s reserve currency had fallen against every one of its major rivals on the year, losing a staggering 12% against the euro and nearly 9% versus the British pound (see “Dollar daze,” below).
With volatility over the last two years at record lows traders have been itching to trade something that really moves. Bitcoin definitely fits that description. On the first day of 2017 bitcoin traded above $1,000 for the first time since January of 2014. The highest price for bitcoin at the time was 1,216.70 in 2013. By June 5, 2017, the price more than doubled to 2,874.00. On Nov. 12 it was trading at $5,426.
Semiconductor stocks are being sold. What should a trader do? First off, realize the earnings growth is there. That is keeping the fire lit on the bullish outlook for these types of large-cap stocks over a longer annual time frame.
Whether or not the corporate tax rate drops to 20% won’t matter much to U.S. companies, which have put up a stellar performance this year and are expected to continue their run into 2018. The S&P 500 saw earnings grow nearly 10% in 2017 (through Dec. 4), an annual rate not seen since 2011.
Delphi Automotive recently split its stock into Aptiv (APTV) and Delphi Technologies. Delphi Technologies represents the firm’s spun-off powertrain segment while Aptiv encompasses its electrical architecture and electronic lines. Former parent, Delphi Automotive PLC is one of the world’s largest automotive parts makers, churning out a vast array of parts for the auto and commercial vehicle industries.
With volatility over the last two years at record lows traders have been itching to trade something that really moves. Bitcoin definitely fits that description. On the first day of 2017 bitcoin traded above $1,000 for the first time since January of 2014. The highest price for bitcoin at the time was 1,216.70 in 2013.
The re-awakening of Artificial Intelligence and constant technological advancements have given a rebirth of robotics in the recent years. An open-source based Robotics Operating System supported by Google (GOOG) has changed the robotics field for everyone to build faster and lower-cost robotics applications, machinery in new start-up companies. Exploitation of new Graphical Processing Units has enabled the existence of Big Data, computer vision, deep-learning and machine learning to further accelerate advances in both the AI and robotics fields.
Kenneth M. Jakubzak had been involved in futures markets for five decades, and after a short hiatus he has returned with his hybrid forex strategy Currency Program that produced a compound annual return of 16.02% over more than 20 years.
Many people are in a veritable state of hysteria following the Federal Communications Commission vote on Chairman Ajit Pai’s “Restoring Internet Freedom” (RIF) order. It’s a nasty state of affairs, and it’s one unfortunately driven by a lot of false rhetoric and outright fearmongering over how policy is actually changing. Telling people that a policy change will “end the internet as we know it” or “kill the internet” can agitate troubled people into doing crazy things.
February is the shortest month of the year and there is no specific market insight to it such as the Santa Claus rally or January effect. It is one of the poorer performing months in all three major indexes: number eight in the Dow Jones and Nasdaq Composite and number nine in the S&P 500, but averages moderately positive returns in the Dow and S&P with a more robust 0.73% in the Nasdaq.