Fund Commentary (Mar. 2014)

adaws eagle fund commentaryNet return for the month was 5.21% vs 0.69% for the S&P 500.

We've been a little more cautious this month due to the violent swings in the market. The most important aspect of trading is preserving capital, no matter what. Without capital, then the game is pretty much over.

Missed opportunities are far easier to live with than making big costly mistakes.

March Trades

No new positions were opened this month, nor any current positions closed / managed. Instead, we opted to allow time decay to work in our favor.

Market Update

No matter how hard investors and the Fed push the stock market, the rally keeps getting narrower, which signals exhaustion. For example, the net number of new 52-week highs on the NYSE peaked in May 2013 and has made a succession of lower highs since then.

It's been investor optimism driving the markets to sky highs so far, but this can only go on for so long. Markets fall faster than they rise, so caution is needed to not trade too bullish.

The USD remains in an uptrend that started in March 2008. Currently we are seeing the XLF and USD/JPY to be highly correlated to the SPX. Just pull up a chart of the SPX, XLF, USD/JPY and look at the days leading up to March 27. Notice how correlated these charts are?

All for now, and enjoy the warmer weather.

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