Category: Mean Reversion
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What is going on? 3rd Quarter Market Trends and Mean Reversion
The third quarter is now in the past, so I’ll share a few observations of what is going on. First, below is the S&P 500 stock index over the past quarter. For observation purposes, if… Read More
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What You Need to Know About Long Term Bond Trends
There is a lot of talk about interest rates and bonds these days – for good reason. You see, interest rates have been in a downtrend for decades (as you’ll see later). When interest rates… Read More
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My 2 Cents on the Dollar
The U.S. Dollar ($USD) has gained about 20% in less than a year. We observe it first in the weekly below. The U.S. Dollar is a significant driver of returns of other markets. For example,… Read More
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This is When MPT and VaR Get Asset Allocation and Risk Measurement Wrong
I was talking to an investment analyst at an investment advisory firm about my ASYMMETRY® Global Tactical and he asked me what the standard deviation was for the portfolio. I thought I would share with… Read More
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“There is always a disposition in people’s minds to think that existing conditions will be permanent …
“There is always a disposition in people’s minds to think the existing conditions will be permanent,” Dow wrote, and went on to say: “When the market is down and dull, it is hard to make… Read More
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VIX® gained 140%: Investors were too complacent
Several months ago I started sharing some of my observations about the VIX ( CBOE Volatility Index). The VIX had gotten to a level I considered low, which implied to me that investors were too… Read More
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Trend Change in Dollar, International Stocks, Gold?
Directional trends tend to persist. When a price is trending, it’s more likely to continue than to reverse. A directional trend is a drift up or down. For example, we can simply define a uptrend… Read More
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Business Cycle: Mean Reversion and Trends
The National Bureau of Economic Research publishes U.S. Business Cycle Expansions and Contractions in the economy. During an expansion, economic growth is rising and during a contraction it is slowing or actually falling. Below is… Read More