Today's market activity was especially challenging: too 'risk-on'

By Jeffrey Cohen

Today, the market reversed course and stopped declining. In addition, we saw evidence of short squeezes and higher-risk stocks advance.

We saw this last night in our model run. It suggested the same types of risky, new economy stocks with much higher conviction. The model ran with almost 40 'ticks' of edge or alpha over the S&P 500 Equity Index ETF (SPY).

We also saw the base, underlying metrics for our top factors change during the day to support the shift. It isn't supposed to work this way, or is it? Market directions shift, underlying factors move sympathetically, then by the end of the day the equity indices have moderated their gains, faded their runs, and the day ends having even lower volatility than it did.

Time for a video to work through the details. Please check our youtube channel.