Hidden Markov models are making inroads into institutional trading. Their applications are broad. One, forecasting future indicator values, can give you an edge trading the currency and commodity markets.
We have been writing about our bearish views of the bond market, and we still hold those views. With the stock market rallying to new 2013 highs today, we believe a sharp move down in bond prices will occur soon.
Commodities were poised to enter a bear market as U.S. reports on manufacturing, jobless claims and home sales signaled a faltering economy after the Federal Reserve refrained from announcing another round of stimulus.
Last month we wrote about ratio condors (unbalanced condor) and how they can allow you to maintain a bullish position while protecting yourself against a dramatic downward spike. It can work in the reverse