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Mean-reversion in daily stock market returns is waning after the extreme levels reached late last year. Since mean-reversion in daily returns is the result of buying the dips, a reversal to momentum could be problematic near all-time highs. As shown in ...

The technology sector is at the edges of unprecedented tail risk after a rally of more than 150% in the last three years. With wishful thinking driving decisions of the investment community and portfolio managers, the odds of a large ...

Equities rise longer-term but due to low Sharpe ratio investors are exposed to high risks of large and prolonged drawdown periods. The upward drift in the US stock market may continue even after another bear market, as long as innovation remains ...

We have added free software to Trader Education section for identifying strategies from price action.

I backtest the maximum Sharpe portfolio for stocks/bonds allocation as derived by Modern Portfolio Theory and for different measures of asset correlation. Below are my findings and conclusions. Modern Portfolio Theory (MPT), also known as mean-variance analysis, offers a mathematical solution ...

There were six “buy the dip” formations this year so far. Is this latest correction going to be another buying opportunity or the beginning of an extended correction? Here is the chart of the day. Disclaimer:  No part of the analysis in this blog constitutes ...

The bundle includes strategies for mean-reversion, and breakouts. Below are the details and offers. MRDJ Mean-Reversion Strategy For Trading Dow 30 Stocks This is a mean-reversion strategy for trading Dow 30 stocks based on price breakouts. B2S2 Mean-Reversion Strategy For Trading Dow 30 ...

This week we terminated a good product primarily because many people were confused when comparing it to another but more popular product. This had a negative impact on sales due to being unable to choose between the two. It was ...

Depending on timeframe different charts are suitable but in the case of investors, rate-of-change in the quarterly or yearly timeframe may be more useful. Many permabears use compressed linear scale charts of stock indexes in an effort to create an artificial ...

In this article we describe how we create a watchlist of stocks with extreme overbought/oversold conditions and then apply a long/short strategy. We  consider Russell 3000 constituent stocks as the primary universe and then scan for stocks that are more than ...