Did November fly by for anyone else? Hard to believe it has already been a month since the MF Global meltdown. Anyway, we’re here on the first of December and able to look back to report that, according to the Newedge CTA Index, managed futures finished November up +0.85%. While, at first glance, those returns may see meager, they are a relief after the sharp rally yesterday – which we feared may pull returns into the red.

After the blood bath that was October, we came into November with hopes for an end of year rally. For a little while there, it looked like our wish might be granted. Trend followers seemed to find their groove once more with renewed downward pressure in Global markets, and option sellers even continued with their success. Short-term systematic traders were still struggling, and discretionary traders pulled back from most trading as choppy volatility still plagued the market. All that conspired to leave the Newedge CTA index at +1.7% for November heading into Monday.

And then…. yesterday’s massive upswing. Just like the major movement we witnessed in the beginning of October, the surge across the board in nearly all ‘risk on’ markets went against many managers positions, representing a last second (even if only momentary) reversion of the trends they’d been following. Whether that trend reversed back down today was of little consequence as the closing bell sounded; the damage was done, and November performance would take a hit as a result.

Unsurprisingly, trend followers, and, in particular, short-term systematic traders, were caught in yesterday’s reversal, but options sellers continued to outperform the other managed futures strategies in play. The end result was a net positive performance for managed futures after falling -3.72% in October. Here’s hoping that December witnesses Santa delivering some trends that return us to where managed futures was at the end of April this year…