How is the macro picture effecting trend following?
As we register the first meaningful signals of 2025, it's striking how few markets are in strong up-trends (US Equities being the exception).
Given the breadth of uncorrelated markets that our Trend Strength Indicator monitors, could there be larger forces at play?
There aren't any signicant trend changes in the main category's this month other than existing trends becoming slightly stronger or weaker. One interesting thing happening now in our trend strength (which isn't visible on this chart) is that there are very few markets in a strong uptrend. Given the breadth of our investment universe, it is somewhat unusual to see so few uncorrelated markets registering strong uptrends, US equities being the obvious exception. Is there an underlying macro reason for this? We aren't sure but something to keep in mind if thinking about going long.
Disclaimer: This document is issued by 10Dynamics Limited (“10Dynamics”). The distribution of this document is restricted by law. It has been made available only to a selected group of recipients. The information contained in this document is also confidential. You must not copy this document or pass it to anyone else. If you (or the legal person you represent) did not receive this document directly from 10Dynamics, please return it to 10Dynamics. 10Dynamics will not act for you (or any other investor) and will not be responsible to you for providing protections afforded to the clients of 10Dynamics’s investment services. Without prejudice to the generality of the foregoing, 10Dynamics does not provide any investment service to you (including, without limitation, the provision of investment advice, or the reception and transmission of orders). This document is not, and must not be treated as, investment advice, investment recommendations, or investment research. Recipients of this document must not take (or refrain from taking) any investment decision on the basis of the information set out in this document. Before making any investment decision, you should seek independent investment, legal, tax, accounting or other professional advice as appropriate, none of which is offered to you by 10Dynamics. 10Dynamics accepts no duty of care to you in relation to investments. This document is for information purposes only. This document is not intended to constitute an offering or placement, or the solicitation of an offer to subscribe for, units or shares in any Fund, in any jurisdiction. Any such offering or placement, if made, would be made only by way of a prospectus (or other formal offering document) for the Fund and only in jurisdictions in which such an offering or placement would be lawful. The offering document for the Fund will contain important information concerning risk factors and other material information concerning the Fund. An investment into the Fund may expose a person accepted as an investor in the Fund to a significant risk of losing some or all of the amount invested. The information contained in this document should not be construed as either projections or predictions. 10Dynamics makes no representation or warranty, express or implied, except as required by law or in the case of fraud, regarding the accuracy, completeness or adequacy of the information. Past performance cannot be relied on as a guide to future performance. Notice for persons in the European Economic Area: In relation to each member state of the EEA which has implemented the Alternative Investment Fund Managers Directive (Directive (2011/61/EU)) (the “AIFMD”) and to the United Kingdom (each, a “Relevant State”), this document may only be distributed to the extent that: (1) the Fund is permitted to be marketed to professional investors in the Relevant State in accordance with AIFMD (as implemented into the local law/regulation of the relevant Member State); or (2) this document may otherwise be lawfully distributed in that Member State (including at the initiative of the investor). In addition, the following restrictions apply to the distribution of this document. Notice for persons in the United Kingdom: This document is approved by Capricorn Fund Managers Limited, which is authorised and regulated by the Financial Conduct Authority (“FCA”). This Document may constitute a financial promotion for the purposes of the Financial Services and Markets Act 2000 (the “Act”) and the handbook of rules and guidance issued from time to time by the FCA (the “FCA Rules”). This document may be issued in the United Kingdom by 10Dynamics to, and/or is directed at, only persons to or at whom it may lawfully be issued or directed under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 including persons who are authorised under the Financial Services and Markets Act 2000 (“FSMA”), certain persons having professional experience in matters relating to investments, high net worth companies, high net worth unincorporated associations or partnerships, or trustees of high value trusts or persons who qualify as certified sophisticated investors. This document may be distributed only to such persons in the United Kingdom and must not be relied or acted upon by any other persons in the United Kingdom. In order to qualify as a certified sophisticated investor a person must: (a) have a certificate in writing or other legible form signed by an authorised person to the effect that he is sufficiently knowledgeable to understand the risks associated with a particular type of investment; and (b) have signed, within the last 12 months, a statement in a prescribed form declaring, amongst other things, that he qualifies as a sophisticated investor in relation to such investments. This document is exempt from the general restriction in Section 21 of FSMA on the communication of invitations or inducements to engage in investment activity on the grounds that it is being issued to and/or directed at only the types of person referred to above. The content of this document has not been approved by an authorised person and such approval is, save where this document is directed at or issued to the types of person referred to above, required by Section 21 of FSMA. Acquiring units may expose an investor to a significant risk of losing the entire amount invested. Notice for persons in other jurisdictions: The distribution of this document may be further restricted by law. Accordingly, this document may not be used in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons to whom this document is communicated should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities law.
Comments