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Welcome to Arrow Insights

Arrow Insights is a research firm with a focus on macro-economic factors that support both fundamental and technical analysis. We believe that theoretical research is most useful when it can actually be applied to tactical trading and asset allocation strategies.

Arrow Insight Indexes

A.I. Managed Futures Volatility Index
The A.I. Managed Futures Volatility Index (AIMFV) is a long/short/flat diversified managed futures index. The index is both systematically and quantitatively based index of numerous components that serve as a proxy for exposures to economic sectors related to financial futures, commodity and volatility futures. Elementally AIMFV provides exposure to Managed Futures sectors. This exposure is complimented with innovative overlays that account for multi-factor seasonality, and a focus on efficient access to directional movements inherent in the underlying components of futures contracts.

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Dorsey Wright Country and Stock Momentum Index & Goldilocks
January 21, 2020

Our last InFocus showed that U.S. stocks, represented by the S&P 500 Index, were overvalued with an expectation that the U.S. dollar was likely to weaken in 2020. As domestic stocks continue to hit new all-time highs in January 2020, it’s wise to consider selling some domestic stocks and buying foreign stocks. Figures 1 and 2 show inflation on the rise. After staying at or slightly below 2% since November 2018, the Consumer Price Index (CPI) recorded a year-over-year (YOY) change of 2.3% on December 31, 2019.

Investment climates vary—some asset classes perform best when on a YOY basis; Real Gross Domestic Product (RGDP) is below 1% while CPI remains below 1%, RGDP is below 2.5% while CPI remains above 3.5%. The former is a deflationary bust while the latter is an inflationary bust. Recessions are common in both climates. Stocks perform poorly while bonds best stocks in the former while commodities shine in the latter.

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Performance, Expectations & Critical Warnings

2017 began with high expectations for economic robustness and with investors savoring the taste of President’s Trump’s victory, which was topped off with Republican control of all branches of the federal government. The stock market, high yield and global risk markets were on fire until crude oil and commodities resumed their bear markets (begun in May 2011) in mid-January 2017. As of June 30, 2017, domestic stocks and lower quality foreign stock and bond markets remain in bull markets, but domestic high-yield bonds, real estate stocks, energy securities and technology shares have stalled or declined over the past few months.       

Stronger than expected economic data in the U.S. and Europe at the beginning of the year has ebbed into lackluster real gross domestic product growth (RGDP) below 2.0% year-to-date (YTD). Investor sentiment rages on as the bulls are running on a narrower street. High quality bonds and U.S. Treasury bond (TSY) yields are higher than they were prior to November 2016 but they are well below the yields had in mid-January 2017. [More]