You may have noticed that CCM programs are taking fewer trades than usual in recent weeks. This is an automatic response by our various trading models to the highly volatile markets conditions experienced recently.

Market volatility across the financial spectrum has increased substantially due to a variety of economic factors, not the least of which include the upcoming presidential election, the current financial credit crunch, falling commodity prices, substantial foreign currency moves and so on.

 Nearly all of the models used by CCM’s trading programs employ volatility filters, or “collars”, that dictate whether or not an entry signal will be considered for execution. The range of these filters varies between programs.

  For some of CCM’s smaller programs, such as the Global Basic program, these filters are much more stringent than are the ones employed in the models used in some of our larger programs such as the Millennium or Jupiter programs.

  Months ago, we began noticing a reduction in the number of entry signals taken by the smaller programs. Since then, market volatility has risen to the point of affecting even the long-term models used in our larger programs.

  These volatility filters have been developed and tested using up to 60 years of historical data. CCM has NOT made any trading model changes recently – the current reduction of new trade entries are a normal aspect of our models and are NOT the result of any decisions at CCM to override our trading models’ signals. 

The net result of this market volatility has been a substantial reduction in trades taken by the CCM models. Whether this is good or bad remains a debate for another day. However, in periods of high volatility, our models naturally focus on capital protection and we strongly believe that this is the appropriate overall course of action to take in the current environment. If you have any questions or comments, please call or email us.