confidential do not copy or distribute 1 outlook presenter's slides.pdf · oil crash: only 5...

Confidential Do Not Copy or Distribute 1

This information is produced by the Association for Technical Analysis (AfTA) and is intended for the private use of its members

only.

Although reasonable care is exercised in presenting the information contained herein, AfTA does not make any guarantee or other

representation as to the accuracy or completeness of such

information, nor that use of any such information will result in profits

or prevent losses.

Neither the Association nor its Officers assume any responsibility

whatsoever for errors or omissions.

Comments or materials presented do not necessarily reflect the opinion of AfTA or its Officers, nor do they constitute an endorsement

of any products or services mentioned.

The Association for Technical Analysis A TA www.afta-dfw.com

Disclaimer

TONIGHT’S SPEAKER


Dean Somes Cross Capital Partners

Anadromous Research

Mr. Somes is the portfolio manager for Cross Capital Partners, a family office

located in Dallas, TX. He is a graduate of Boston College, earning dual B.A.

degrees, and a published author, having written chapters in two books titled, Your

Options Handbook (Wiley, 2011), by Jared Levy and What's Behind the Numbers?

(McGraw-Hill, 2012), by John DelVecchio and Tom Jacobs, which was awarded the

2013 Book of the Year by Stock Trader's Almanac.

Mr. Somes also provides institutional technical analysis research through his

company, Anadromous Research, to the team of fund managers at the first short-

only actively managed ETF named "The Active Bear", (NYSE: HDGE) and the

Forensic Accounting ETF (NYSE: FLAG) as well as other traders and money

managers.


PLAYING NOSTRADAMUS:

A LOOK AT 2015

* Disclosure: Dean Somes nor his companies nor affiliations makes no guarantees or other representations as to the

accuracy or completeness of information presented or discussed within this presentation, nor that use of any such

information will result in profits or prevent losses. What you read or hear should not be considered to be investment

advice. You are responsible for any decisions you make using information received in this presentation. You should do

your own due diligence prior to making any investment decisions.

DEAN SOMES

JANUARY 20TH, 2015


*Disclosure

Swiss Franc & Danish Krone


*Disclosure

Euro


*Disclosure

Currency hedged Euro equities


*Disclosure

Unemployment


*Disclosure

Unemployment Indicators


*Disclosure

US Summary


*Disclosure

US Summary: P/E’s point to limited expansion in 2015 with Tech and Healthcare outperforming again


*Disclosure

Midcaps

PPO = % Price Oscillator

A momentum oscillator measuring difference

between two MA as a % of larger MA.


*Disclosure

SPY ROC


*Disclosure

Nasdaq 100


*Disclosure

Number of Hindenburg Omens up: Increased Volatility?


*Disclosure

Commodities


*Disclosure

Correlation b/w US Dollar and Commodities


*Disclosure

Oil: Tight vs. Conventional


*Disclosure

Oil: Amount of Excess Capacity


*Disclosure

Oil Crash: Only 5 times since ‘85 (3 during US Recessions)


*Disclosure

High Yield Energy Credit: +15% of high yield market


*Disclosure

Strong cash flow and strong valuation


*Disclosure

Strong revenue, cash flow and valuation


*Disclosure

Gold


*Disclosure

30-Year Yield


*Disclosure

Conclusion

Oil should snapback to around $60/barrel.

Credit is the subsector that should provide the best risk/reward return structure. However, spreads could widen just a bit further.

The ECB QE decision should mark an important

inflection point for European stocks.

A large QE would be immediately beneficial for Euro stocks. Watch HEDJ.

Gold is improving as investors diversify their currency holdings.

2015 could be another year of US dominance versus

Europe and other non-commodity countries

However, volatility should increase this year based on a normalization of

equity response to earnings growth.


*Disclosure

Conclusion

Yields are falling, coinciding with the fall in

commodities.

A rebound in commodities may see a spike in yields, pushing bonds back down from overbought levels.

If inflation rises, US Dollar should fall.

Thus, a rebound in commodities is important to watch.


*Disclosure

Thank you!

Dean Somes

Manager, Cross Capital Partners, LP

President, Anadromous Research LLC

[email protected]

TONIGHT’S SPEAKER


Ian Naismith

Naismith Trading Labs

Ian Naismith lives in Frisco, Texas and owns Investment Portfolio Solutions, Inc. and Naismith

Trading Labs, Inc., and licenses trading signals to financial institutions in the global areas of

equities, debt, commodities, currencies, and special situations. Also, he is currently Chief

Technical "Animalyst" for MBS Highway.

He has created and operated two registered investment advisory firms; created and co-

managed a global currency mutual fund - Currency Strategies Fund; was a contributing author

to "Technical Analysis in the FX Markets" (published by The Technical Analyst, UK), and has

been the January cover story in FOREX Journal (published in Singapore) five years in a row -

including 2014. He has developed trading indicators, indexes, and consults mutual funds,

registered investment advisors, and financial product manufactures.

Naismith is an honorary board member, past president and chairman of the National

Association of Active Investment Managers (NAAIM) which represents about $35 billion under

management.

DISCLAIMER • This is not direct investment advice, nor is

intended to be investment advice, or construed as investment advice; but is meant to hopefully add to your well diversified toolbox for decision making.

• If I offend you, please forgive me.

• A lot of this is my opinion – therefore fact… ;-)

• Equal emphasis (if not greater) should be given to “store of value” compared to “how do I make 15% instead of 10%”…

Quick Bio • Owner, “Artist At Work” of Investment Portfolio

Solutions, Inc.

• Index, product creation; institutional consulting

• Assist in signal providing to mutual funds, hedge funds, RIA’s, UCITs funds (over $1.3 billion)

• Published author – FOREX; created/managed U.S. global currency mutual fund

• Past president/chairman of National Association of Active Investment Managers (NAAIM)

• Avid music composer/performer/collector; avid cook

• Wife & girlfriend of 35 years, 2 children, live in Frisco TX.

BIASES…

• I only create portfolios and signal to institutions in a dynamically moving hedge format… No naked longs or shorts for me…

• Over the long haul, smoothness of equity curve, volatility and drawdown control is more important to me than the total return…

• No algorithm, indicator or logic works of all the time… Thus have an allocation inventory system of a competing algos and indicators – and be willing to step aside yourself when your system is not working…

Before 2015 outlook, quick primer of

continuing poo-poo (that will influence

2015...)

•Continued “holographic markets” via overt and covert manipulation of economic indicators, employment numbers, futures contracts, interest rates, machine trading, etc. etc. etc. with the goal of forcing the “risk trade”…

Poo poo, cont. • Political ineptness with all things fiscal and/or

creating value (on both sides…sorry…….)

•Attempted electronic sabotage…

•Global currency shell games and the continued myth of a strong dollar…

•A gunning for control of the electronic landscape, both digital currency and internet policing…

• The further dividing of the economic cold war…

Now, 2015… already some changes!

• The two year market cadence is decaying!!!

• Market cadence defined: a sequence of increasing or receding time frames comprising the whole of a market phase…

• Important: detection of the POTENTIAL closure of a market phase through runup and decay tracking…

Which would you rather own???

So… based on current markets, be on the lookout for…..

• Cadence behavior – if the current cadence decay continues in the short term, it increases the chances for much greater volatility this year – thus a traders market and/or more caution for strategic allocators…

• If the current decay is eradicated soon with the resumption of dominant cadence from 2013 – strategic allocation and buy on the dips makes sense – but keep your eye on breadth…!!!!!!!!!!!!

• If there is a cadence stair-step down with lower highs and lower lows on the > +2 & < -2% tracking, fasten your seat belt….

Finally --- Fractured exchanges!!!!!!!!

• Find news sources that point out “mini flash crashes” within different exchanges. Starting sources = NANEX and it is generally reported after detection on ZeroHedge.com If you notice more flash crash activity, then adjust accordingly…

• Outside of an engineered or truly surprise geopolitical, technological or medical event, I believe a “Black Swan” is showing itself now is exchange fracture --- where micro flash crashes turn to mini flash crashes turn to macro flash crashes…

• If a macro event occurs, we cannot assume the frequency, severity, or exchange/govt response to such event(s)… This is the age where the designers of machine learning are warning us of the machines knowing more than us in the near future….

Ian Naismith contact info….

•[email protected]

•Cell 941-586-8658

•When not traveling – I am very accessible and like red wine…..

mailto:[email protected]

confidential do not copy or distribute 1 outlook presenter's slides.pdf · oil crash: only 5...

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