Author Archives: Brian Johnson

About Brian Johnson

I have been an investment professional for over 30 years. I worked as a fixed income portfolio manager, personally managing over $13 billion in assets for institutional clients. I was also the President of a financial consulting and software development firm, developing artificial intelligence based forecasting and risk management systems for institutional investment managers. I am now a full-time proprietary trader in options, futures, stocks, and ETFs using both algorithmic and discretionary trading strategies. In addition to my professional investment experience, I designed and taught courses in financial derivatives for both MBA and undergraduate business programs on a part-time basis for a number of years. I have also written four books on options and derivative strategies.

Extreme Divergence: Earnings and Equity Prices

Posted on February 20, 2013 by

Earnings are the ultimate driver of stock prices and the divergence between earnings expectations and equity prices has become even more extreme.  Given that the market is technically overbought, implied volatility is extremely low, the CBOE Skew Index is over … Continue reading →

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Posted in Economic Indicators, Fundamental Analysis, Market Commentary | Tagged , , , , | 3 Comments

Market Overbought – But Wait for the Trend Change

Posted on February 14, 2013 by

I introduced the concept of market breadth in a post titled “The Secret Weapon of Technical Analysis.” Based on current breadth readings, the equity market is overbought and due for a pullback.  However, trading against the trend has a low … Continue reading →

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Posted in Market Breadth, Market Commentary, Market Sentiment, Technical Analysis | Tagged , , , , , , , , , | 4 Comments

U.S. Recession Risk Still Low in January

Posted on February 7, 2013 by

The following article updates the diffusion index, recession slack index, aggregate recession model, and aggregate peak-trough model through January 2013. If you are new to Trader Edge and would like some additional background on the development of the Trader Edge … Continue reading →

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Posted in Economic Indicators, Fundamental Analysis, Market Timing, Recession Forecasting Model | Tagged , , , , , , , , | Leave a comment

Non-Farm Payroll (NFP) Forecast: January 2013

Posted on January 31, 2013 by

I introduced a simple non-farm payroll forecasting model a few months ago.  Over the past month, I have developed a much more sophisticated model that aggregates the forecasts for three neural network models, each with a unique architecture.  The aggregate … Continue reading →

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Posted in Economic Indicators, Market Timing, NFP Forecasting Model | Tagged , , , | Leave a comment

Real GDP Growth Negative in Q4 2012

Posted on January 30, 2013 by

Earlier this week, I posted the Q4 2012 GDP forecast from a new aggregate neural network model.  The model forecast was +2.2%, but the first official estimate of GDP growth in Q4 2012 was only -0.1%, which was the first … Continue reading →

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Posted in Economic Indicators, Fundamental Analysis, GDP Forecasting Model | Tagged , , , , , | Leave a comment

New Neural Network Model – Q4 2012 GDP Forecast

Posted on January 27, 2013 by

The following article introduces a new aggregate neural network model that was designed to forecast the seasonally-adjusted, annualized, real rate of change in U.S. GDP. I have been doing recession research and constructing recession models for the past several months, … Continue reading →

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Posted in Fundamental Analysis, GDP Forecasting Model | Tagged , , , , , , | 4 Comments

Combine Indicators to Identify High-Probability Reversals

Posted on January 24, 2013 by

I read about this indicator in an article titled “The DMI Stochastic,” which appeared in the January 2013 issue of Technical Analysis of Stocks and Commodities.  The article was written by Barbara Star.  In the article, Star combined two well-known … Continue reading →

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Posted in AmiBroker Code, In-Depth Article, Market Timing, Strategy Development, Technical Analysis | Tagged , , , , , , , , , , | 21 Comments

Active Trader Article Now Available for Download

Posted on January 22, 2013 by

I wrote an article titled “The Science of Selling Options” that appeared in the September 2012 issue of Active Trader. The article is now available for purchase and download on the Active Trader website.  If you missed the September 2012 … Continue reading →

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Posted in Uncategorized | Tagged , , , , | 2 Comments