Nadine Terman is the CEO and CIO of Solstein Capital, an investment advisor and financial services firm. In the following article, Nadine Terman of Solstein Capital discusses a new tool launched to guide investors on major equity stock market movements.
Anticipating meaningful moves in the stock market can deliver a huge benefit to both professional and everyday investors. In brief, it enables investors to take advantage of such movements by proactively reducing risk or by seizing on potential upside opportunities, depending on the expected direction of the market.
Nadine Terman of Solstein Capital introduced a new tool called Doomsday Dozen so that investors can take advantage of extreme emotions and positioning. Launched by Longbow Trade Signals, LLC, the Doomsday Dozen tool helps investors be better prepared.
What the Doomsday Dozen Tool Is
Nadine Terman of Solstein Capital explains that the Doomsday Dozen score represents a weighted composite signal of twelve underlying market risk signals that can help guide investors to be more successful. The Doomsday Dozen score ranges from zero (extreme fear in the market) to one hundred (extreme greed in the market), and investors can think of it similarly to an Equifax credit risk score, but for the stock market.
The composite score is driven by twelve underlying signals which include a Fear/Greed Signal that assesses the current emotion driving stock markets, a Market Momentum Signals that tracks how far the market it from its historical range, a Market Strength Signal, which compares the number of stocks hitting new highs versus lows, a Market Breadth Signal that tracks the volume of shares traded in rising versus falling stocks, an Equity Put/Call Ratio that compares the trading pattern of bullish versus bearish call options, a Volatility Signal that reviews historical patterns of market volatility, a Junk Bond Demand Signal that compares the spreads between riskier and less risky credit, a Safe Haven Demand Signal that looks at the returns of stocks versus Treasuries, a Volatility Analysis Signal that compares the volatility of market volatility to its own volatility, a Global PMI Signal that is a proprietary global manufacturing signal, a Yield Inversion Signal that tracks when the yield curve is inverted, and a Volatility Threshold Signal that is a proprietary signal based on volatility metrics.
To make it easy for investors to understand, Nadine Terman represents the score as a speedometer-type chart that highlights the current score on any given day.
A Historical View of the Doomsday Dozen Signal
Below Nadine Terman of Solstein Capital provides a snapshot of the prior year’s Doomsday Dozen Signal. Investors can see that when the signal reached a low in September and October of 2022, the market rebounded shortly thereafter. More recently, when the Doomsday Dozen Signal hit its maximum of 100, the market soon thereafter was pressured.
Longbow Trade Signals also provides historical charts for each of the twelve components signals so that investors can analyze how they have trended over time versus where they currently stand today. So, now investors have a new sophisticated set of tools to assess market emotions and risk, so that they can work to become better investors.
How to Use the Doomsday Dozen to Become a Better Investor
Nadine Terman of Solstein Capital shares that she checks the Doomsday Dozen signal each day on the Longbow platform to stay updated on market risk levels. The Longbow platform offers both free and paid subscriptions, depending on the use level of a customer.
When the signal flags a low, green number, Nadine Terman of Solstein Capital explains that she may invest more capital in the market, trim hedges, and take on more risk because she believes in non-consensus investing. When other market participants are extremely fearful, she looks to be opportunistic. On the flipside, when there is a large red number, she may trim risk in the portfolio, add hedges, or raise cash because when other market participants are showing signs of extreme greed, she wants to be more cautious with client capital. Nadine Terman explains that successful investors often act independently from the crowd to both generate greater returns and also reduce risk.
Investors from around the world have commented on the helpfulness of the Doomsday Dozen Signal. By incorporating it in a daily investment process, investors can use sophisticated data and tools alongside institutional investors such as Nadine Terman and Solstein Capital.
Nadine Terman of Solstein Capital understands the importance of anticipating meaningful moves in the stock market before they happen, as investors can shift exposures in their portfolios to take advantage of irrational or extreme emotions and positioning by other investors. The process can deliver a huge benefit to both professional and everyday investors.
Interested investors can go to https://mylongbow.com/ to learn more about the solution.