Trader’s Narrative

Well, it is the end of another year. And if you are a trader, your thoughts turn invariably to the January effect and more specifically, how you can use this phenomenal annual pattern to generate alpha.
There are a few ways to take advantage of the January effect. My personal favourite is on closed-end funds (CEFs). […]

Want to see something that will knock your socks off?
US Financial Stress Index
The BCA US Financial Stress Index (left) is a proprietary and nutritious blend of these econometric and statistical ingredients:

performance of bank stocks relative to the general stock market
the yield curve
credit spreads
real stock prices
consumer confidence
market leverage
private debt
new bond issuance
new equity issuance

BCA Research is the […]

The stock market tends to move higher the day before and the three days after the Christmas holiday. While the S&P 500 gained an average of 0.035% per trading day since 1950, the S&P 500 has produced an average gain of 0.23% for the day before and each of the three trading days after the […]

Here’s this past week’s sentiment data:
Sentiment Surveys
Investor’s Intelligence (measuring the newsletter editors market bias) is showing a surprising amount of bullishness at 56.5%. This is a slight increase from last week. The II bears fell slightly to 22.4%.
In contrast to newsletter editors, the AAII survey (measuring retail investors) is showing only 36% bulls and 47% […]