There continues to be many conflicting economic data points which are contributing to a wide array of “expert” opinions on where the economy and markets are headed. V-, U-, W-, WW-, L-, J-shaped…it’s an alphabet soup of recovery profiles in a world of complex global uncertainties. We recall very few early forecasts that called for the strong V-shaped recovery we are seeing unfold so far. On one hand, you’ll read that government intervention (fostered by Keynesian economics troupes) and extreme negative consumer sentiment is bullish; on the other hand, others will say the debasement of global currencies, which creates increasingly extreme asset volatility, destruction of purchasing power and a dangerously uncertain debt vacuum, is bearish. And the press headlines broadcast dismal economic metrics for the most part. Yes, we have our opinions too (as you may have read in our previous blogs), but it’s important to understand that our trading strategies are designed to be unbiased, mechanical and math-driven as it pertains to buy and sell decisions. We’ll continue to follow our models regardless of our own opinions, the headlines, or economic data reports. And, of course, as always, we tirelessly work on ways to improve the performance results.
New Forte Futures Strategy
Since its February 2018 inception, our Forte Strategy has been an example of this approach. Using primarily ETFs, Forte continues uncorrelated to the S&P 500 with a fraction of the drawdown experienced by the buy-and-hold index investor. Within the last month, we’ve also launched a second strategy called “Forte Futures”. This new futures version of our flagship Forte strategy uses a balanced selection of low-correlated contracts including the NASDAQ 100, gold, currency futures, and crude oil along with the Volatility Index (VX) futures during peak volatility periods. Forte Futures also includes a few other new components to allow for direct short positions and alternate time periods. Having just gone “live” in May, there is only a limited amount of performance history, so stay tuned as the performance scorecard is established over the coming months.
Forte Strategy Update
A few days ago the volatility level for the equity markets declined to a point where the Nasdaq model became active again consistent with the oil and gold markets in prior weeks. We entered our first trade using the 3X leveraged Nasdaq ETF (TQQQ) after a 14 week pause due to the COVID19 volatility excursion. We executed five trades in the Nasdaq, gold, and oil which were net break-even for the week. Our full year net results so far equal a 1.9% loss compared to a 1.1% year-to-date loss for the S&P 500.
More details about our trading activity can be found by registering on the Collective2 website and searching for Forte Strategy. A running list of these email blogs and general information about Maestro Capital Research can be found at maestrocapitalresearch.com.