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
Equity fuel rises in spite of rally. 2019/03/21
Currency fuel remains high. 2019/03/20
Yen fuel hits the ceiling. 2019/03/19
Bond fuel drops below 50. 2019/03/18
Currency fuel rises substantially. 2019/03/17
A nice rally that cost little fuel. 2019/03/13
Equity fuel rebounds 2019/03/12
It was a great rally but it spent a lot of fuel. 2019/03/11
Equity market fuel creeps even higher. 2019/03/10
The equity gauge gets a big boost 2019/03/07
Today's equity decline didn't add any fuel. 2019/03/06
The euro is down but the gauge is still optimistic. 2019/03/05
Euro fuel, still very bullish 2019/03/04
Yen fuel dwindles but Euro fuel stays healthy 2019/03/03
Tough days for Risk Parity 2019/02/28
Still Dollar Bearish 2019/02/27
Dollar weakness on the horizon... 2019/02/26
Buy bonds as a short equity substitute. 2019/02/25
Equity fuel running very low - we need a bond rally. 2019/02/21
Equity fuel continues to get low. 2019/02/20
Equity fuel wilts. 2019/02/19
Getting out of bonds .... 2019/02/18
Bonds still look better than stocks 2019/02/14
The equity gauge isn't quite bearish but ... 2019/02/13
The government is back at work but the gauges are not impressed. 2019/02/12
Fuel leakage almost everywhere... 2019/02/06
Equity fuel is neutral butt eh market is vey happy. 2019/02/05
S&P gauge is very sticky here just above 50 but beware of bonds 2019/02/04
Fuel Gauge Update in our new format (comments?) 2019/02/03
Are you printing money in RP like Ray Dalio? (You should be) 2019/01/31
No big changes in the gauges 2019/01/29
Bond fuel continues to slide. 2019/01/28
Bond fuel slides ... 2019/01/27
Tonight's Fuel Gauge Update 2019/01/24
Euro fuel reverses and bond fuel is getting perky 2019/01/23
Stops are hit and profits taken 2019/01/22
Only the Yen gauge budges. 2019/01/21
Yen fuel drains away in spite of weak price behavior. 2019/01/20
Bond fuel continues to leak 2019/01/17
Time to hide in Risk Parity? 2019/01/15
Equity fuel fading but still above critical buy level. 2019/01/08
Equity fuel finally cracks. 2019/01/07
Euro fuel rises dramatically. 2019/01/03
Currency Gauges Working Well 2019/01/02
Lots of fuel for bullish seasonals. 2018/12/28
Still Selling Euro's Into Strength 2018/12/27
Equity fuel is high but there's no hurry 2018/12/23
I hope you followed the currency gauge forecast - now what? 2018/12/21
Yen looks ike a better risk-off position than bonds 2018/12/18
Equities should do better 2018/12/16
Equity tank is full even though the government may go on holiday 2018/12/13
Euro fuel stays intact 2018/12/12
Bonds generate a rebound in equity fuel 2018/12/11
We are back after a very unpleasant vacation - did you miss us? 2018/12/09
Staying with long Euro and Yen positions, for now 2018/11/15
Still staying out of $ longs 2018/11/14
Time to reverse long dollar positions 2018/11/13
Time to cover Euro short (for now) 2018/11/12
Bond and Yen fuel still healthier than equities and the Euro 2018/11/11
Buying bonds and the Yen vs the Euro ... 2018/11/08
Yen fuel jumps toward lofty levels with LT bond fuel 2018/11/07
Using trailing stops to protect against fading equity fuel. 2018/11/06
The weekly bond gauge is telling bond traders not to panic - especially since equity fuel is getting scarcer. 2018/11/05
Currency fuel rises -but not enough yet 2018/11/04
Yen fuel sinks again 2018/10/31
Yen fuel rises with the sell off but not enough for me 2018/10/30
The $ still looks safe. 2018/10/29
Time to re-short the Euro? 2018/10/28
Euro fuel is still very low and equities hit a new PTW. 2018/10/25
FX and bond traders - Are you happy?! 2018/10/24
Equity fuel is high but bonds are burning it. 2018/10/23
Euro fuel remains very low. 2018/10/22
Bond fuel creeps higher 2018/10/21
The Euro gauge almost hits the floor 2018/10/18
Time to cover bonds or Euro's? 2018/10/17
That equity rally didn't cost us too much equity fuel. 2018/10/16
Time to buy the Yen vs the Euro? 2018/10/15
Equities are still hot (with stops please) 2018/10/14
Weekly bond fuel crashes out (again) 2018/10/11
Equity fuel is high but stops are required. 2018/10/10
Bond fuel creeps higher. 2018/10/09
S&P fuel hits the ceiling while Euro fuel sits on the floor 2018/10/08
Equity fuel remains strong 2018/10/07
The equity is very positive (but the markt feels very sick) 2018/10/04
Get long the dollar, somehow 2018/10/03
The dollar looks very healthy 2018/10/02
Euro fuel takes a hit but is the Yen a better short? 2018/10/01
No big changes in the gauges 2018/09/30
S&P fuel rises even more. 2018/09/26
Bond and Yen fuel are running desperately low. 2018/09/25
The weekly bond fuel tank sprung a huge leak. 2018/09/24
We have a new performance of the fuel gauges. 2018/09/20
The equity tank is losing fuel due to higher yields. 2018/09/19
Equity fuel hangs in. 2018/09/18
The Yen gauge flips up 2018/09/17
Yen fuel remains very low. 2018/09/13
Currency gauges have little fuel. 2018/09/12
Yen fuel recovers but not enough to cover. 2018/09/11
Use the Yen as your short position 2018/09/10
Friday was ugly but it didn't change much. 2018/09/09

Analysts

  • Chris Evans

    Analyst Years of Experience: 30
Chris Evans

Equity fuel rises in spite of rally.

Paratrade Systems Premium Report

Chris Evans

Currency fuel remains high.

Paratrade Systems Premium Report

Chris Evans

Yen fuel hits the ceiling.

Paratrade Systems Premium Report

Chris Evans

Bond fuel drops below 50.

Paratrade Systems Premium Report

Chris Evans

Currency fuel rises substantially.

Paratrade Systems Premium Report

Chris Evans

Equity fuel rises in spite of rally.

Paratrade Systems Premium Report

Chris Evans

Currency fuel remains high.

Paratrade Systems Premium Report

Chris Evans

Yen fuel hits the ceiling.

Paratrade Systems Premium Report

Chris Evans

Bond fuel drops below 50.

Paratrade Systems Premium Report

Chris Evans

Currency fuel rises substantially.

Paratrade Systems Premium Report

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