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 – Marginally down for the week; little change in metrics — maintain buy.
- JETS ETF – Flattish for the week; little change in metrics — maintain sell.
- Oil – Sizable gain for the week; little change in metrics — maintain buy.
- USLargeCapGrowth – Flattish for the week; still in crash state but correction size drops — maintain buy.
- USSmallCapValue – Flat for the week; expected return falters and hedge slips — downgrade to hold.
- RealEstate ETF – Decent gain for the week; little change in metrics — maintain hold.
- TSLA – Negative return in the past week; moves out of crash state; expected return picks up a little; hedge goes to 2 — upgrade to buy.
- USUnvGradeBond – A down week as interest rates rose; little change in metrics — maintain buy.
- Technology ETF – Down for the week; little change in metrics — maintain buy.
- HealthCare ETF – Down for the week; return no correction dips — maintain buy.
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.