Equity Sense Stocks. Options. Futures. Currencies.

December 2015

2015
At A Glance

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A Message from Gavin
It was not so long ago that two lost boys from Wall Street
started this small outfit. What began as an advisory firm
gradually expanded to helping more than just our friends and
family. Little did we know that we would grow to over 300
clients worldwide. Mike and I never had plans to start a firm
together. We figured, after our financial careers, we would just
be your typical daytraders. However, the events of 2008 put
forward the need to help our close friends and family survive
one of the worst financial crises in our lifetime.
I am extremely happy that I stepped aside and let Mike take the helm. With
his patience and strong business acumen, he has been able to add small and
medium firms to our clientele. In 2015, we have seen some astonishing
additions to our community. We have seen strong growth in Europe, Asia and
Australia. Clients have been very happy and we are seeing record renewals
this month for the 2016 fiscal year.
What A Year
This year has brought about so much in the markets. It has rewarded both
the bulls and the bears. It has brought a record number of funds to their
knees as well. From the Swiss Franc Armageddon early in January to the
Greek debt crisis in the summer to now the FOMC rate hike debacle, there
were plenty of events to keep us on our toes. What this year sparked
perhaps is the debate of whether this is finally the last positive year of the
bullish cycle and whether we are finally going back down to reality.
The difference between Equity Sense and other firms is that we care not
about economic fundamentals. Fundamentals, though important, will almost
certainly be put in the backseat for years until the market decides that they
are important. So if you trade solely on fundamentals, you would for sure
have been in a world of hurt waiting for reality to kick in.
Oil and the entire commodity space have been in a world of hurt and the
mainstream financial media has continually downplayed this as not being
recessionary. This has given us a huge edge against other traders. While a
good majority of the world would believe the mainstream media, we knew
what was really happening. We could not ignore iron ore, global shipping
volumes and the Baltic dry index as a cause for concern.

www.equitysense.com | Twitter: @EquitySense

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Lets not forget how the emerging markets are continually being crushed by a
strong dollar. In the race to devalue, it has brought about a very strong
dollar. Because commodities are priced in USD, it makes it that much more
difficult for the EM to trade. We have also seen capital outflows from the
emerging market economies as worries of a global slowdown spook
investors. China, with the CNY now included in the SDR, has done what we
expected it to do - devalue their currency.
Making Sense of It All
A lot of what has happened this year can be broken down to the logical and
illogical. We guided clients through the worst this year. A trader who would
know what they are doing would get through this year unscathed. However,
for the uninitiated and the inexperienced, a guiding light would be a welcome
sight as we move through these treacherous waters. This is perhaps our
strength at Equity Sense: despite the volatility and the mayhem, we still
come out alive and profitable.
Not allowing our personal biases and emotions blur the reality of the markets
have done so well in ensuring we get through each trading day and week
profitable. Though not every day may be a profitable day for us, we have
continued to produce gains on our personal trading accounts. Otherwise, I
am sure we would have closed up shop and rejoined the workforce.
This is the kind of environment we try to foster at Equity Sense - one of
objectivity and pragmatism. This is how we have survived as traders for
more than a decade and it has always gotten us out of tight situations.
Looking Ahead
The expectations for 2016 will be that it is the same as 2015. We have
models in place that tell us what year it is coinciding with. Clients have been
informed of what that is and we will trade it as much as seasonal aspects will
allow. However, we will take whatever we can get in the new year. When you
are dealing with central bankers with experimental policies, you really cannot
expect conventional market results. There is a trend that you can follow to a
certain degree but you must manage the variations as best as you can.
I am pretty sure there will be more managed funds imploding next year as
their traditional risk models no longer work. Already we are seeing
unprecedented demand for mentorship and I do not think that is going to
slow down. As more mutual funds and hedge funds implode, investors will try
to be more responsible with their money and seek more education to better
inform themselves.

www.equitysense.com | Twitter: @EquitySense

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Even with all this madness, I am optimistic that we can find some calm in the
markets and in the world. I do not mind turmoil in the markets but I do not
wish to live in a more dangerous and paranoid world. However, if history has
taught us something it is that economic depressions typically lead to more
global conflict. I truly hope that will not be the case for 2016.
The next year will be challenging but I think we are all well positioned to
handle the turbulence. As for 2015, it was a fun and profitable year. This is
what makes trading fun - the constant struggle to understand money flow
and position yourself advantageously. As we count down the days to the end
of the year, let us all be thankful that we have grown to understand the
markets better and we leave the year still profitable and happy.
On behalf of Mike and the rest of the Equity Sense team, I wish you a
very safe and happy holiday season!

www.equitysense.com | Twitter: @EquitySense

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