Bubbles, crashes, rallies, and corrections
The Efficient Crashes Optimizer (ECO) asset price model identifies signatures in price data indicating potential crashes or rallies and estimates the magnitudes, the probabilities, and the timing of expected moves. Using a set of assets of interest in the current market, various predictions from the modelling process are highlighted in the table below.
We track the simulated performance of this list by using the ‘hedge’ column to weight each asset return. Note that some assets can be levered up to 2X.
ECO Bubble Predictions
- Gold – Gave back the prior week’s gain; maintains rally state; hedge goes positive — upgrade to buy.
- JETS ETF – Pummeled in the past week; little change in metrics — maintain buy.
- Oil – Another huge gain for the week as the trend shows no sign of stopping; expected return pops — maintain buy.
- USLargeCapGrowth – Managed to sneak up for the week; little change in metrics — maintain sell.
- USSmallCapValue – Beats large cap growth once again; expected return, return no correction, and hedge all go positive — upgrade to buy.
- RealEstate ETF – Rose modestly for the week; little change in metrics — maintain sell.
- TSLA – Moderate gain for the week; moves out of crash state; expected return and return no correction improve — maintain buy.
- USUnvGradeBond – Another rather big loss for the week; expected return and return no correction go negative — downgrade to sell.
- Technology ETF – Eked out a gain for the week (similar to large cap growth); expected return and return no correction remain negative — maintain sell.
- HealthCare ETF – Small dip down over the past week; expected return and return no correction remain weak — maintain sell.
For more details see ECO Explanatory Notes
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ECO scores are an important input in the AugurMax investment process. A powerful, cutting edge asset allocation engine is created when combining ECO scores with the RisKontroller optimizer.