The presence and extent of overheating in markets has been identified by Omega Analysis’ risk measurement technology.

​

Our Unstable Expansion indicators provide price levels which, historically, have produced reliable profits for short positions during market downturns. Predicted Correction levels now vary from 13% to 72%.

​

The trading strategy is to maintain risk-controlled short positions in a portfolio of ETFs until the expected Correction Level is attained or the Trend Indicators for the S&P 500 indicate that a rebound is underway. As the shorts are exited the proceeds can be held in cash or Treasuries until a rebound signal for the U.S. market is received.

​

In addition, some ETFs may enter ‘Unstable Contraction’ mode after the Correction Level is attained. In this case further short positions would be held until a rebound signal is received.

​

Trading the Rebound In every previous major downturn in the S&P 500 Index and its precursors, our Rebound Indicator has been a reliable signal of the next ‘Value’ period in the US equity market. This will be used as a trigger for the resumption of long positions across asset classes and sectors.