Highlights From Stocktoberfest 2015

Another Stocktoberfest in the books and as always it was a lot of fun, I learned a ton and shared ideas with some of the best in the business. This is an event that I look forward to every year because I come out of it wiser, for many reasons. I learn so much from the presentations over the two day period, I hear market ideas and strategies from market participants that I have a lot of respect for, and I can bounce ideas around with other attendees that give me feedback or present alternative solutions to what I am trying to accomplish.

There are a few things that stood out to me this year. First of all, it was bigger than it's ever been. The new location at the Hotel Del Coronado was amazing. Rather than walking a few blocks away to a theater, the entire event was within close proximity to the pool, bar, beach, etc. This makes networking easier, not to mention how beautiful this 130 year old hotel is. You never want to leave.

I really enjoyed Dr. Brett Steenbarger's presentation. As a trading coach for the likes of Paul Tudor Jones among many other traders, he brings a unique perspective to this event. One point he made that got my attention was with regards to trading journals. He said that when he's looked through traders' journals, they are generally filled with examples of bad trades and positions where they, "shit the bed". Rather than going back a studying losers over and over again, he suggests studying the good trades. In other words, reinforcing the good behavior and what you did right to make money.

Another important point that he tried to drive home was about how to best organize your calendar. Each day, first start by putting in activities that make you happy, that give you satisfaction, that increase your energy and also affection (your relationships).  After you have included these activities in your calendar, then put in what you have to do - your work. His point was to make work fit into your schedule rather than plan your life around an infinite workload.

Dr. S says that developing ourselves as traders means developing ourselves as people. You succeed by becoming more of who you already are. You will succeed by what drives your best performance and becoming better and better at accessing that.

Here is a copy of the handout he distributed which describes in 10 steps how to maximize trading performance. I think it's great:

Dr. Brett Steenbarger Training For Trading by eaglebaycapital

I also really enjoyed the panel about Millennials. Lindsay Campbell did a great job of moderating a group that included Rachel Fox, Jeff Macke and Todd Sullivan. The biggest takeaway for me was about financial content, particularly video content, and how millennials consume it. I don't know many people who watch financial TV and those who do are dying off every day. Younger generations want an on demand, watch what you want, when you want it model. Financial content is not meant to be consumed over a 24 hour period, but in smaller doses. It's impossible to fill a whole day with quality video content and this is likely the reason why financial television ratings are at all-time lows and the quality of the content, for the most part, is just not there. Consensus seemed to be that the winner of this battle between the financial content providers will be whoever is able to curate the best user generated content in an easy to search for way. Makes sense to me. We'll see.

Mid-way through the first day, I was lucky to be on a panel with some of my favorite technicians in the business. Charlie Bilello, Brian Shannon, Mark Arbeter, Ryan Detrick, Chris Kimble....these are some of the best out there and guys that I have a ton of respect for. I tried to explain how Fibonacci continues to come into play again and again and again. We continue to see this. Also, with regards to biotechnology, I had to reiterate that this decline has nothing to do with Hillary Clinton Tweeting. The sell-off began well before that, momentum had already been diverging negatively, support had already been broken, and her tweet coincided with a retest of overhead supply. Just because it's a coincidence that this occurred simultaneously doesn't mean they had anything to do with each other. The market has proven me right on this over the past month.

Here are my slides:

A few other notable charts in the panel were the Commodities charts from Chris Kimble. He thinks we're at a critical level here in several cases, particularly in the Thompson Reuters Commodities Index. If these break it should be a problem, but if prices can hang on, things should be fine. I think this is definitely an interesting one.

I thought Charlie Bilello made a great point of describing the current market environment in both stocks and bonds as a tough one going forward. The S&P500 forward 6-year returns historically from where we are at current CAPE (Cyclically Adjusted P/E) levels tend to be some of the worst returns in market history. In bonds, with yields currently where they are, the 6-year forward returns are also not something to get excited about. We are currently in uncharted territory in terms of the current environment, and not in a good way. Charlie believes that a more tactical approach to the market here appears like a much better strategy that a buy and hold traditional stocks-to-bonds split.

Here are the charts showing that:

There is so much more to share from this past week but I would be here all day. I think you'll just have to see for yourself and join us next year. As a technician, it's my job to recognize trends. In the case of Stocktoberfest, I've been to all 4 of these events and each year gets better. If my calculations are correct, next year will be the best one yet. Hope to see you there!