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Strategy ETFs are gaining attention. Below are examples of strategy ETFs we track. In the Price Action Lab Report of this week, we introduce a section for strategy ETFs due to their growing use in diversification strategies. We plan to add ...

Simple momentum has outperformed asset rotation, both long-short and long-only. Despite the underperformance this year, simple momentum has limited complexity and could continue to outperform asset rotation in the future. Definitions for this article: Simple momentum: Long SPY if the price is ...

There are many risk management schemes with varying sophistication.  This article lists seven of these schemes, ranked by increasing complexity. There are two important parts to every successful trading and investment strategy: Timing Rules. Risk management. In this article, we focus on the risk ...

After a sharp rise from mid-April to mid-May of this year, stock market volatility is crashing. This has been historical a good sign for equities, except when it was not. The daily chart below shows the 21-day annualized volatility of the ...

Losing discipline and not following basic rules is more prevalent during a bear market and a slow “pain trade”. Using strategies to enforce discipline is not sufficient to escape the adverse effects of a slow “pain trade” and high volatility mixed ...

We will be introducing a new strategy in the next Weekly Market Signals report for long/short factors. The strategy will be integrated with the ensemble of current strategies starting next year. Our weekly Market Signal report is currently based on the ...

As compared to the previous two bear markets, the current correction is not more orderly, but is faster and marked by higher volatility. There have been references to the current correction as “more orderly”. Words mapped to markets make sense only ...

Updated October 10, 2022. A long-short mean-reversion strategy for trading a portfolio consisting of SPY, QQQ, and TLT ETFs.

Inflation is the (adverse) result of the interaction of a large number of variables in a highly non-linear economic system. It’s also a humbling process for those who rush to make forecasts about inflation levels. In my M4 presentation in New ...

When inflation and rates rise, equities and bonds fall. If commodities are also volatile, there is capital destruction because there is no safe asset. Unrealized gains and losses become transitory. The right strategies are known only in hindsight. Descriptive statistics reflect ...