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

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Title Date
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
Gasping for fear in the S&P market. 2017/04/30
The S&P leaky tank is becoming a problem. 2017/04/28
The S&P fuel tank has a hole in it. 2017/04/27
Shifting towards bonds 2017/04/24
Start your Risk Parity engines. 2017/04/23
Almost time to switch ES position into an RP position 2017/04/20
Some hope for bonds... 2017/04/19
The equity spring compresses some more. 2017/04/18
The S&P gauge still has plenty of fuel. 2017/04/17
It's getting hot in here. 2017/04/16
We are all in, with a stop. 2017/04/12
Weaker Weeklies 2017/04/10
Today's rally didn't hurt much 2017/04/06
Shifting out of bonds 2017/04/04
Sticking with Risk Parity 2017/04/03
Stay with RP but overweight equities. 2017/04/01
RP looks to be on solid ground. 2017/03/29
Holding on to my longs, with wide stops 2017/03/28
This is what we wait for. 2017/03/27
Nervously long everything 2017/03/23
The equity gauge gets happy. 2017/03/22
Are all you bond traders happy?! 2017/03/21
The weekly bond gauge gets hit. 2017/03/20
The daily RP gauge shows a little life. 2017/03/19
Tightening my bond stop 2017/03/16
Bond Vindication 2017/03/15
Bonds refuse to hear good news. 2017/03/14
Tightening my equity stops 2017/03/12
Going into NFP -long 2017/03/10
The (daily) bond gauge soars. 2017/03/08
I'd prefer it if this pullback were scarier. 2017/03/06
Bonds are still healthy 2017/03/05
Nibbling on bonds... 2017/03/03
A great rally and fear rose!! 2017/03/01
The weeklies are soaring! 2017/02/26
The weeklies are soaring! 2017/02/26
Equity fear ROSE as the market upticked 2017/02/23
Fear ROSE as the market upticked 2017/02/23
Nice drop in S&P vol. but the gauge is being stubborn. 2017/02/22
Nice drop in S&P vol. but the gauge is being stubborn. 2017/02/22
The daily bond gauge hits the floor 2017/02/21
The daily bond gauge hits the floor 2017/02/21
Fear is now back near its floor but bonds are filling in. 2017/02/20
Fear is now back near its floor but bonds are filling in. 2017/02/20
The S&P gets more fuel from bonds - for now 2017/02/16
I'm missing the rally and I still can't get short ... soon, I promise 2017/02/14
Tomorrow might bring the drop in fear that I/We need. 2017/02/14
Not enough energy to buy but still not set up to short... 2017/02/12
Too rich to buy and still not set up to short... 2017/02/12
The bond gauges are getting some help from oil. 2017/02/08

Analysts

  • Chris Evans

    Analyst Years of Experience: 30
by Chris Evans 2h / 42m
English
2 pages
by Chris Evans
Premium

The weekly bond gauge jumps and the daily crashes out.

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 1d / 2h / 22m
English
2 pages
by Chris Evans
Premium

Bonds are a pleasant surprise.

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 4d / 2h / 50m
English
2 pages
by Chris Evans
Premium

Still hanging on to my bonds

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 5d / 1h / 37m
English
2 pages
by Chris Evans
Premium

The bond fuel tank sprung a leak

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 6d / 1h / 53m
English
2 pages
by Chris Evans
Premium

Staying with Risk Parity

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 2h / 42m
English
2 pages
by Chris Evans
Premium

The weekly bond gauge jumps and the daily crashes out.

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 1d / 2h / 22m
English
2 pages
by Chris Evans
Premium

Bonds are a pleasant surprise.

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 4d / 2h / 50m
English
2 pages
by Chris Evans
Premium

Still hanging on to my bonds

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 5d / 1h / 37m
English
2 pages
by Chris Evans
Premium

The bond fuel tank sprung a leak

Paratrade Systems Premium Report

English
2 pages
by Chris Evans 6d / 1h / 53m
English
2 pages
by Chris Evans
Premium

Staying with Risk Parity

Paratrade Systems Premium Report

English
2 pages

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