The US dollar index (UUP) ended the week with a loss of 0.3%. Gold (GLD) finished the week with a gain of 1.4% but was significantly off the highs.
Stocks (SPY) initially fell 2.9% but rallied 1.9% on the last day of the week to finish with losses of 0.9%.Ĭommodities (DBC) fell for the third week in a row and initially were down nearly 5%, but rebounded in the last two days to trim losses to 1.8%. Theoretically at least, one could use a machine learning algorithm to identify experts with higher odds of making good forecasts, but it is by far simpler to resort to strategies. This requires a higher-level process of evaluating experts that is difficult to design and test due to a limited sample. There are also problems with this approach, and it is not a panacea by far, but it at least removes some of the biases if applied correctly, and provided that the strategies are robust, a good ensemble of them may provide superior risk-adjusted returns.Īll in all, the choice to concentrate on strategies rather than following macroeconomy gurus is based on the fact that if their forecasts diverge so widely, the long-term expectation will be negative unless one is lucky to follow the right one at the right time. Since macroeconomic forecasting turns out to be an exercise in futility on average, we have decided to use strategies. Most suffer from confirmation bias and wishful thinking. Some are better than others at analyzing information, and a few are very good. Some other analysts claim there will be a soft landing, while others insist the landing will be hard.Īll analysts have something in common: they do not know anything with any degree of reasonable confidence.
Some analysts think a recession is imminent this year, while others claim there will not be one. The state of the US economy continues to be uncertain, with the numbers triggering widely diverging interpretations and forecasts. Market Recap and Comments May 1- May 5, 2023) Positions and Performance of Strategies.ġ. The weekly systematic trading reports include a market recap, open positions, new signals, and the performance of six trading strategies.ģ.
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