Janus Factor (Bloom Fin)

Tap into feedback loops to unravel market trends and discover profitable trading opportunitiesThe Janus Factor presents an innovative theory that describes how feedback loops determine market behavior. The book clearly shows how the theory can be applied to make trading more profitable. The metaphor of the two-faced god Janus is used to reflect alternating market environments, one dominated by trend followers and the other by contrarian bargain hunters.In this book, author Gary Anderson puts forth a systematic view of how positive and negative feedback drive capital flows in the stock market and how those flows tend to favor either sector leaders or sector laggards at different times.* Discusses how to find better performing stocks* Outlines when and how to use momentum strategies for big profits* Addresses when and how to use contrarian strategies* Gary Anderson is the winner of the 2003 Charles H. Dow Award, presented by the Market Technicians AssociationIntellectually challenging and highly practical, The Janus Factor offers insight into market behavior and new methods for capturing stock market trends.

The Janus Factor viiIntroduction xiiiAcknowledgments xvCHAPTER 1 Foundations 1Serendipity 2The Data Set 5Reasons and Causes 6Befuddled 7Which Way Is Up? 9CHAPTER 2 The Assignment 13Measuring Risk: Offense and Defense 14Picturing Offense and Defense 17The Benchmark Equivalence Line (BEL) 19The Trend of Relative Performance 22CHAPTER 3 Feedback and Capital Flow 27Feedback 28Feedback and Capital Flow 31Calculating Relative Strength 37The Relative Strength Spread 39Trend Followers and Contrarians 41CHAPTER 4 The Janus Factor 45Structure and Entropy 46Confidence 47Is the Market Predictable? 48Balancing Acts and Paradigm Shifts 54CHAPTER 5 Seasons of Success 57The Venturi Effect 58The Relative Strength Spread and the Performance Spread 61Group Studies 68CHAPTER 6 Why Jesse Went Broke 71The Cotton King 741911-1914 75The Final Years 80CHAPTER 7 Sheep Dogs and Other Contrarians 83The Sheep Dog Effect 85A Contrarian Hedge? 87The Contrarian Rebound 88The Contrarian Collapse 92CHAPTER 8 Situational Awareness 99Bielema's Choice 101The Bet 106Let Us Calculate! 109CHAPTER 9 The Direction of Momentum 115Relative Momentum 117Relative Momentum versus Relative Strength 123CHAPTER 10 Long Strategies 127The Critical Moving Average 127The DOM Strategy 129Contrarian Threats 130A Defensive Long Strategy 133It's a Bull Market, You Know 135CHAPTER 11 The Complete Strategy 137Combined Long and Short Strategies 139The Model Portfolio 141Execution 143Appendix 149About the Author 163Index 165