THE XLF BREAKS-OUT, NOW WHAT

A big deal is being made in the social media front about the $XLF “breaking out” technically today as if that is suppose to mean something.  ETF’S are for the most part mean reverting vehicles, in which I’m more incline to buy them once they pull back and look “ugly”, not when they breakout after being up 4 days in a row or up 9 out of the last 10 days  like the $XLF currently.  The context of the breakout is more important than the actual breakout. The $XLF is up over 5% in the last 10 days and this has been the most dominant pattern over the next 5 days since 2009 when the XLF is up 5% in 10 days;

Via @MarketMemory

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Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets

Liquidity Is Completely Relative

Liquidity is completely relative to the size of your portfolio.  I know that most people have this arbitrary number to say what is or what is  not “liquid”.  Some people say at a minimum a stock has to trade 1 million shares or 500k shares, but the fact is, a stock that trades 1 million shares per day might be liquid for many but maybe not for a 25 billion dollar portfolio manager.  And vice versa, a stock that trades 100k shares daily might be plenty liquid for a trader that only has a $30k dollar portfolio.  So forget the arbitrary numbers and define liquidity based on your portfolio size.  If you are not a mutual fund then don’t try to trade like one or use their or anyone else’s definition of “liquid”.

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Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets

Myths, Fact, Fiction About Momentum

There's so many myths in the market place, mostly coming from people who have failed investing/trading a certain way or are only allowed or want to do a certain type of investing.  It’s like a manager who only runs a long only gold fund that has to be fully invested at all times, he will obviously like gold under every circumstance and cycle.  Or a bank stockbroker who can only recommend mutual funds, of course he will steer you away from individual stocks, he will give you every reason on why its stupid to buy individual equities.

There has always been myths about momentum trading which has been around for 200 years and its probably one of the few strategies you can actually quantify.  There’s a million way to skin a cat; value investing, momentum trading, buy and hold, asset allocation, mean reversion, etc…It all comes down to risk management, avoiding large draw-downs, and finding out what strategy best suites your personality.   But always be wary of those one way street guys, the ones that tell you it can only be done “this way” and every other way is a fools’ approach.

Fact, Fiction and Momentum Investing academic study will tell you all you need to know about momentum trading, enjoy.

Fact, Fiction and Momentum Investing

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Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Buy The Dip

The SP500 is down roughly 3.4% from its 7/24 $1987 high.  If you bought the dip and you are temporarily down regardless of the outcome you did the right thing.  Buy the dip is what the market has conditioned everyone to do since 2009, and buying the dip has worked tremendously over the last year or so.  The discipline based on recent market action (last few years) was to buy the dip not to short in the hole since that has not worked for a long time.

But once you buy the dip if you did how you handle it afterwards is what will make all the difference in the world and this is when risk management and awareness of the current situation comes into play.

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Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets