Paratrade Systems

Gauging Fear to Fuel Superior Returns

We measure the key variables that have historically sparked good returns in stocks and bonds. Once we know where they stand we can skew risk/reward in our favor.

There are only a few things we need to know to determine when there is good money to be made in stocks and bonds:

  • In stocks we measure how scared people are and whether interest rates are rising or falling. There may be other factors involved in a long term trend but these two factors are the keys to significant positive returns.
  • For bonds, we must measure inflation and economic growth. If the former is benign and/or the latter is weak, we can expect good returns.

It’s that simple. Paratrade’s fuel gauges boil these factors down to two simple indices for each market – one is daily and the other is weekly. There are also two such gauges for the “risk parity” position where you are long both stocks and bonds.

We can study the historical performance of the market when the fuel gauges are at varying levels. The table at my site shows filtered S&P and bond returns for different ranges of the indices. There is a clear skew.  

By subscribing to Paratrade’s daily commentary, you will receive an update about where these indices stand. Can you afford not to know?


Coverage

Export
Title Date
Oil is the story - for now. 2018/04/20
No big changes 2018/04/18
Bond fuel is rising 2018/04/17
Waiting for bonds to help equities but it won't be easy ... 2018/04/15
The gauges fade ... 2018/04/12
We have lots of (equity) fuel and lots of problems - isn't that the way it always is? 2018/04/11
The weekly bond gauge crashes out ... 2018/04/10
Weekly bond fuel gets drained by a decline in (Syn)Vix 2018/04/09
The weekly equity gauge hits the ceiling again. 2018/04/08
No tariff talk please 2018/04/06
The daily gauge finally gets above 60! 2018/04/05
The (equity) rally cost us little 2018/04/03
The weekly equity gauge hits the roof. 2018/04/02
The weekly gauges are hot 2018/04/01
The equity gauge rises but fails to get above the (safe) buy threshold. 2018/03/28
The weekly gauges hit 6 month highs 2018/03/27
This is what we wait for! 2018/03/26
We are getting the shock(s) we need (in equities). 2018/03/25
Equity fuel is running very low 2018/03/04
The RP trade/position is intact by virtue of very skewed volatility ratios. 2018/02/28
We are sending most of the equity fuel we earned from the pullback. 2018/02/18
The equity and Risk Parity gauges are nearly full but maybe it's easier to express the trade differently. 2018/02/11
Yes, I finally have a buy signal on ES and Risk parity ... 2018/02/07
The Vix spike has provided us with a healthy amount of (transient) fuel. 2018/02/06
We'll need some great earnings news to offset higher interest rates ... 2018/02/01
The equity gauge remains stuck in no man's land. 2018/01/28
Saying goodbye to Risk Parity 2018/01/23
Equities rally but Vix barely declines - a good sign. Buying Risk parity is a better way to get long equities. 2018/01/22
The RP gauge is still OK ... did you partake? 2018/01/17
Bonds are completely out of gas - thanks to oil's relentless rise. 2018/01/10
The bond gauge recovers, but bonds still need more fuel. 2018/01/07
The daily gauges hit very bearish levels at the same time. 2018/01/04
Extend your New Year's holiday! 2018/01/01
The equity fuel tank just lost a lot of fuel. 2017/12/28
The rally was costly but don't get bearish, yet. 2017/12/16
The bond gauge creeps higher in spite of the price rise. 2017/12/13
The equity gauge weakens but we're still OK .. Go RP!! 2017/12/11
The gauges still love Risk Parity 2017/12/06
I got a chance to add to my Risk Parity position. 2017/12/05
The equity gauge remains impervious to rallies. 2017/11/28
The weeklies shift higher into neutral territory. 2017/11/26
Tuesday's decline helped the equity gauge. 2017/11/24
Today's rally didn't hurt the equity gauge. 2017/11/22
The equity gauge is sticky at lofty levels. 2017/11/19
The Risk Parity gauge crosses a threshold. 2017/11/15
The equity gauge hits 100! 2017/11/12
The equity tank still has lots of fuel. 2017/11/05
Staying with equities 2017/10/30
We had a trauma event! (You need to know hat that means) 2017/10/25
Still nervously holding on to my equity position. 2017/10/24
The weekly bond gauge jumps and the daily crashes out. 2017/10/16
Bonds are a pleasant surprise. 2017/10/15
Still hanging on to my bonds 2017/10/12
The bond fuel tank sprung a leak 2017/10/11
Staying with Risk Parity 2017/10/10
The daily equity gauge moves (up) to neutral. 2017/10/09
I'm staying with my long Risk Parity position. 2017/10/05
Bonds and RP stay healthy 2017/10/04
The bond market is completely out of gas. 2017/09/28
The (daily) fuel tanks don't have much fuel. 2017/09/10
The equity gauge will be sticky. 2017/08/13
A new trauma even fills up the equity fuel tank. 2017/08/09
Today's rally was pleasant but somewhat expensive 2017/08/07
Did we get enough additional fuel to add to our long equity position? 2017/07/30
Equities are running out of gas. They need a good surprise from Washington or ... 2017/07/25
Sticking with (long) RP 2017/07/17
That was an expensive (but pleasant) rally. 2017/07/09
That tiny rally ate up a lot of (equity market) fuel. 2017/07/05
Happy Dailies and Sickly Weeklies 2017/07/02
Nice rally but it cost us a lot of fuel. 2017/06/28
We finally got some bad news/fear. 2017/06/27
The equity gauge inches closer to a buy level. 2017/06/22
The equity tank gets a modest refill. 2017/06/15
Yes, I still prefer bonds 2017/06/13
The weekly equity gauge is not happy with bonds. 2017/06/12
Nasdaq volatility helped the equity gauge a little but we need more. 2017/06/11
The daily bond gauge rose back up to its ceiling. 2017/06/08
The daily bond gauge loves the oil mess. 2017/06/07
US $ weakness is hurting the daily bond gauge. 2017/06/06
The daily S&P gauge is gasping for a pullback. 2017/06/05
The weekly equity gauge hit the ceiling! 2017/06/04
The weekly gauges get healthy 2017/05/30
In the short term bonds look safer than stocks. 2017/05/29
Oil swings the bond gauge 2017/05/25
NQ's still doing their job 2017/05/24
Not much S&P gas left but my stops are still untouched 2017/05/23
Tightening my stops on NQ's 2017/05/22
The bond gauges have crashed! 2017/05/21
Say goodbye to bonds 2017/05/18
Today's price decline didn't bolster the daily (S&P) gauge. 2017/05/17
Short term (equity) traders should be short or flat 2017/05/16
I hope you have been following me ... 2017/05/14
S&P will struggle without a bond rally 2017/05/10
Vol adjusted fear is still too low for a rally in the S&P 2017/05/09
Equities are tired so protect them with bonds. 2017/05/08
Rallies don't hurt the S&P gauge 2017/05/07
Bonds have a lot of fuel going into tomorrow's news... 2017/05/04
Apple volatility changed nothing. 2017/05/03
Bonds are on solid ground. 2017/05/02
The market rally pushed the S&P gauge UP a little. 2017/05/01

Analysts

  • Chris Evans

    Analyst Years of Experience: 30
by Chris Evans 2d / 7h / 50m
English
2 pages
by Chris Evans
Premium

Oil is the story - for now.

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 3d / 9h / 37m
English
2 pages
by Chris Evans
Premium

No big changes

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 4d / 9h / 37m
English
2 pages
by Chris Evans
Premium

Bond fuel is rising

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 6d / 11h / 40m
English
2 pages
by Chris Evans
Premium

Waiting for bonds to help equities but it won't be easy ...

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 12/04/2018
English
2 pages
by Chris Evans
Premium

The gauges fade ...

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 2d / 7h / 50m
English
2 pages
by Chris Evans
Premium

Oil is the story - for now.

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 3d / 9h / 37m
English
2 pages
by Chris Evans
Premium

No big changes

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 4d / 9h / 37m
English
2 pages
by Chris Evans
Premium

Bond fuel is rising

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 6d / 11h / 40m
English
2 pages
by Chris Evans
Premium

Waiting for bonds to help equities but it won't be easy ...

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 12/04/2018
English
2 pages
by Chris Evans
Premium

The gauges fade ...

Paratrade Systems Premium Report

English
2 pages

ResearchPool Subscriptions

Get the most out of your insights

Get in touch