06-30-2014 AAR Strategy Update Posted

Posted on June 30, 2014 by

The June 30, 2014 AAR Strategy update is now available on the AAR Subscribers page.  If you are not currently a subscriber and would like to learn more about the strategy, there is a detailed description on the AAR Strategy page.

The AAR strategy is a conservative, long-only, asset allocation strategy that rotates monthly among five large asset classes: large-cap U.S. stocks, developed country stocks in Europe and Asia, emerging market stocks, U.S. Treasury Notes, and commodities. The strategy was inspired by the Ivy League portfolio and uses trend and technical filters to reduce downside risk.

If none of the five candidates pass their respective trade filters, the AAR strategy remains in cash for the month.   Stop-loss orders are used on every trade to control losses and to facilitate position sizing.

Brian Johnson

Copyright 2014 - Trading Insights, LLC - All Rights Reserved.

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A New Market Timing Indicator

Posted on June 26, 2014 by

I am always on the lookout for new trading tools, indicators, and insights.  One of my primary sources of inspiration is magazines like Active Trader and Technical Analysis of Stocks and Commodities. Now that I have finished my first book, I finally have some additional time to investigate new research ideas. I recently read an interesting article in the June 2014 issue of Active Trader by Euan Sinclair titled "Uncertainty as a Predictive Tool."  Sinclair concluded that the standard deviation of strike prices in the option chain (as a function of volume) could be used to measure uncertainty or ambiguity, which is predictive of future performance.  I was intrigued by the idea and I dedicated some time over the weekend to constructing and testing an uncertainty indicator as a predictor of the performance of the S&P 500 index.

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Posted in Market Timing, Options, Technical Analysis | Tagged , , , , , , , | 1 Comment

Option Strategy Risk / Return Ratios #1 on Amazon Again

Posted on June 24, 2014 by

The print version of my new book "Option Strategy Risk / Return Ratios: A Revolutionary New Approach to Optimizing, Adjusting, and Trading Any Option Income Strategy was the #1 Options book on Amazon again this morning. Since reaching #1 last month, the book has consistently been in Amazon's top 10.  In addition, the early reviews have been very encouraging; eleven independent readers have posted 5-Star reviews.

If you enjoyed the book, please consider posting your own review on Amazon and sharing your insights with other prospective readers via Amazon and via social media.

Thank you for your continued support.

Continue reading for the complete reviews on Amazon.

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“Flash Boys”

Posted on June 19, 2014 by

Michael Lewis's new book Flash Boys: A Wall Street Revolt is both fascinating and entertaining, but as a trader, I also find the issues raised in the book to be deeply disturbing. Here are a few of the most troubling assertions from Flash Boys.  First, most exchanges are owned and operated by public companies that are catering to high-frequency traders (HFT) in an attempt to maximize short-term revenues.  Second, HFTs have a speed advantage in both seeing and executing market orders.  Finally, HFTs are using their speed advantage to front-run our orders.

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Recession Model Forecast 06-01-2014

Posted on June 12, 2014 by

The following article updates the diffusion index, recession slack index, aggregate recession model, and aggregate peak-trough model through May 2014.

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

Non-Farm Payroll (NFP) Model Forecast – May 2014

Posted on June 5, 2014 by

This article presents the Trader Edge aggregate neural network model forecast for the May 2014 non-farm payroll data, which is scheduled to be released tomorrow morning at 8:30 AM EDT.

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

05-30-2014 AAR Strategy Update Posted

Posted on May 30, 2014 by

The May 30, 2014 AAR Strategy update is now available on the AAR Subscribers page.  If you are not currently a subscriber and would like to learn more about the strategy, there is a detailed description on the AAR Strategy page.

The AAR strategy is a conservative, long-only, asset allocation strategy that rotates monthly among five large asset classes: large-cap U.S. stocks, developed country stocks in Europe and Asia, emerging market stocks, U.S. Treasury Notes, and commodities. The strategy was inspired by the Ivy League portfolio and uses trend and technical filters to reduce downside risk.

If none of the five candidates pass their respective trade filters, the AAR strategy remains in cash for the month.   Stop-loss orders are used on every trade to control losses and to facilitate position sizing.

Brian Johnson

Copyright 2014 - Trading Insights, LLC - All Rights Reserved.

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Recommended Reading 05-29-2014

Posted on May 29, 2014 by

Readers repeatedly ask me for book and article recommendations, especially new traders who are interested in learning more about trading and investing.  Here is another book recommendation from my personal finance library. A complete list of all past recommendations is available on the Recommended Reading page.

Brian Johnson's Recommendation

Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices, Fourth Edition

by Thomas J. Dorsey

Point & Figure Charting is a practical guide to understanding and applying Point & Figure charting to all aspects of trading across a wide range of instruments.  It begins with a detailed introduction to point and figure charting that assumes no prior knowledge of the subject. Dorsey then delves deeper into the fundamentals and objective chart patterns that can be used to manage both short-term and long-term trades.  The point and figure tools are then applied to an analysis of relative strength and general market direction.  Finally, Dorsey explores sector rotation, fixed income, ETFs, and even commodity trading.  Dorsey is one of the leading experts on point and figure charting and the book and accompanying CD provide a educational and practical guide to using these fascinating tools.

To learn more about point and figure charting, please revisit my article on this subject titled "The Easiest Way to Identify Trends."

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