Frequently Asked Questions

Click on the (+) at the top right corner of the screen. This will allow you to add personalized viewing “tabs” that you can populate with the stock tickers of your choice.

As soon as you log into The Longbow Dashboard you will see your tickers under the ‘My Tickers’ tab.

After you’ve reached your max number of tickers, the system will ask if you want to upgrade to the next subscription level. You will not be automatically upgraded to the next subscription level. In order to receive more tickers, you must choose to upgrade.

The Trading Ranges and all other signals are updated daily based on the previous trading day’s Closing data. However, the Range View, Range Signal, Downside, Upside, and Odds are all updated when the Last Price is updated, which is hourly, starting at 7AM (updates are ~20 min delay).

We will be adding display color change in our next version. We’ve gotten similar feedback from our Beta users. We’re working on it.

After adding a Longbow Tab (such as US Sector ETFs), go the the “+” on the upper right-hand corner, click on “Longbow Tabs”, then scroll down to the tab purchased, then click the box to put it on the dashboard. You can turn the Longbow Tabs on/off at your discretion.

The Longbow Dashboard is currently configured for desktop only.
Yes, each month you will be automatically charged based on the subscription you purchased. Any upgrades will be prorated for the time remaining on your monthly subscription.
Yes, the max limit is 200.
Yes, you can deactivate the automatic renewal. You will have access to The Longbow Dashboard and tickers purchased until your subscription lapses.
Longbow does not offer refunds.

WHAT IS IT?
A security’s price, including its current price as well as its price history, is a key input in Longbow’s analyses. Typically, it reflects the price at which a security traded. That said, it is not a guarantee of an actionable trade price; the liquidity of a security may affect the executable price or the price at which an investor can actually buy or sell the security.

WHY DO WE WATCH IT?
The price of a security reflects the value of the asset underlying it. Therefore, the market price for a security indicates the consensus value placed on its asset by all the buyers and sellers in the market. So, it reflects the valuation by investors, which is important to analyze over time, to understand how a security trades and how it may trade in the future.

HOW DO WE USE IT?
Longbow analyzes patterns in security prices to drive key signals, such as the Trading Range, Short-Term Momentum Level, and Medium-Term Momentum Level.

Also, Longbow displays security pricing data for users who are interested in knowing the price. For example, Longbow displays the closing price from the most recent trading day for all users—plus the current price for users who have upgraded. Also, Longbow displays the returns for a security, which is the percent change in a price from a previous price. Through The Longbow Dashboard, investors can see how a security’s price has changed over various periods of time, for example: one-day, five-day, one-month, three-month, and a year-to-date basis.

WHAT IS IT?
Volume is the total number of shares traded on a security on a day.

WHY DO WE WATCH IT?
Volume matters because without liquidity, investors cannot easily trade a security. Simply put, if there is insufficient volume traded, investors may not be able to exit or enter a position.

Volume also matters because it provides insights into the strength of security price moves, and these insights may strengthen or weaken conviction about a security price’s trend. Typically rising volume will confirm a security price’s trend, and declining volume may flag weak conviction or a potential change in the trend.

For example, the combination of (i) a meaningful increase in volume traded for a security plus (ii) an increase in a security’s price may point to continued upward momentum in the security’s price. Alternatively, the combination of (i) decelerating volume traded for a security plus (ii) an increase in a security’s price may point to potential weakness in the security’s price.

HOW DO WE USE IT?
Volume is an input in Longbow’s analyses; it is useful on its own and when considered in conjunction with other inputs.

For example, Longbow reviews current and prior trade volume levels for a security, and Longbow analyzes these volume data points in the context of other key inputs such as security price movements.

WHAT IS IT?
Volatility is a metric that measures the magnitude of the change in prices for a security. Realized volatility is the historical volatility of a security’s price over a specified time period. It measures the variance of a security’s price and represents the risk of price moves for a security, calculated from the standard deviation of day-to-day logarithmic historical price changes. In more simple terms, realized volatility tells us how much a security price has moved. Volatility is not necessarily bad, yet higher volatility typically increases the uncertainty around a security price’s trends.

WHY DO WE WATCH IT?
At the minimum, investors watch realized volatility to understand how a security’s price has changed. That said, investors also watch realized volatility as one gauge of certainty, or risk level.

Longbow’s dashboard provides a picture for a security’s realized volatility over time so that investors can understand the historical trend of volatility underlying past patterns of a security’s price action. These patterns may provide insights into how a security may trade in the future.

For example, if a security’s volatility has been declining over time, then there may be more certainty in price movements in the short-term ahead; on the contrary, if a security’s volatility has been increasing over time, then there may be more uncertainty in price movements in the short-term ahead.

However, when there are events that move a security’s stock price meaningfully up or down (e.g., the surprise resignation of a beloved CEO, the attractive acquisition of a competitor), the short-term volatility of a security may increase, yet over time it may move back to its typical range.

HOW DO WE USE IT?
Longbow displays realized volatility so that investors can quantify the inherent price risk of a security, and whether the risk may be increasing or decreasing. Longbow also compares realized volatility with implied volatility, or the expected fluctuations of an underlying security, as priced in the options market—which we cover in a separate section.

WHAT IS IT?
By gauging significant imbalances in supply and demand, implied volatility represents the market’s expected, or implied, future volatility for a security’s price, determined by analyzing options pricing for that security through their premiums. Options premiums are directly correlated with these expectations, rising in price when either excess demand or supply is evident and declining in periods of equilibrium.

The level of supply and demand, which drives implied volatility metrics, can be affected by a variety of factors ranging from market-wide events to news related directly to a single company. For example, if several Wall Street analysts forecast right before an earnings report that a company will at least meet and perhaps beat consensus projections, implied volatility and options premiums could increase substantially in the few days preceding the report. Once the earnings are reported, implied volatility is likely to decline in the absence of a subsequent event to drive demand and volatility.

WHY DO WE WATCH IT?
Investors watch implied volatility to understand the market’s projection for the forecasted variance in returns for a security’s price –how the market is pricing in potential volatility, or price risk, for a security. Implied volatility differs from realized volatility in that implied volatility is about future expectations, and realized volatility is about history.

HOW DO WE USE IT?
Longbow displays implied volatility so that investors can assess the inherent price risk of a security that the market is pricing in, and whether the risk may be increasing or decreasing. Longbow also compares implied volatility with realized volatility through the implied volatility premium/discount calculation–which we cover in a separate section.

WHAT IS IT?
A security’s Implied Volatility Premium/(Discount) is a ratio that includes both Realized Volatility and Implied Volatility.

It is equal to the percent change of its Implied Volatility to Realized Volatility. For example, if a security’s Implied Volatility is 18%, and its Realized Volatility is 10%, then the security has an Implied Volatility Premium of 80% (the percent change of 18% divided by 10% -1). In this case, investors are expecting greater volatility and uncertainty in the future than in the past, and most likely they have been bidding up the price of options on that security. This happens when the implied volatility is greater than the realized volatility of that security.

As a second example, if a security’s Implied Volatility is 8%, and its Realized Volatility is 10%, then the security has an Implied Volatility Discount of -20% (the percent change of 8% divided by 10% -1). In this case, investors are expecting less volatility and uncertainty, and options have become cheaper. This happens when the Implied Volatility is less than the Realized Volatility of the security.

WHY DO WE WATCH IT?
Longbow compares Realized Volatility with Implied Volatility for a security to estimate whether investors are expecting greater or less certainty for a security’s price in the future. These expectations are important because they often are reflected by actual positions in the options market for that security. For example, when investors expect greater uncertainty and are fearful, typically it means that they are paying for downside protection through purchasing put options, bidding up the premium which increases the Implied Volatility. On the flipside, when investors expect less uncertainty and are complacent, typically it means that they are not paying for downside protection on that security in the options market, and the premium is less, which decreases the Implied Volatility.

HOW DO WE USE IT?
Longbow incorporates the Implied Volatility Premium/Discount to understand how investors are positioned, so that investors can gauge if a position they are interested in is consensus or not.

Longbow also analyzes the trends in a security’s Implied Volatility Premium/Discount. If a security’s Implied Volatility Premium is getting bigger, than investors are getting even more fearful and defensively positioned. If a security’s Implied Volatility Discount is getting even more negative, then investors are getting even more complacent and offensively positioned, as cheaper options prices are similar to an insurance premium becoming cheaper. Because Longbow is capturing real-time data, investors can have a timely read on where market positioning is for each security.

WHAT IS IT?
Longbow created a proprietary signal to let investors know how the market is positioned, based on a security’s Realized Volatility and Implied Volatility.

WHY DO WE WATCH IT?
Investors watch the Implied Volatility signal because it provides a quick visual summary of the underlying data.

HOW DO WE USE IT?
When there is a meaningful Implied Volatility Premium, investors will see a red Fear signal—and may choose to act contrary to the market and buy the underlying security. Conversely, when there is a meaningful Implied Volatility Discount, investors will see a green Greed signal—and may choose to act contrary to the market and either sell/trim a position or buy relatively cheap protection.

WHAT IS IT?
Longbow created a visual comparison of the Implied Volatility Premium/Discount of 24 key exposures based on leading ETFs. The exposures range from factors (e.g., high beta) to sectors (e.g., S&P 500 technology) to assets (e.g., high yield bonds) to markets (e.g., emerging markets).

WHY DO WE WATCH IT?
Investors easily can see where the market may have the most fear (via a long green bar and high Implied Volatility Premium number) and the most greed (via a long red bar and deep Implied Volatility Discount number).

HOW DO WE USE IT?
The visual landscape is informative to investors seeking to trim positions and/or buy protection via options on positions when the market is greedy on a security (long red bars). Similarly, investors may seek to add to positions and/or buy call options on positions when the market is fearful on a security (long green bars).

WHAT IS IT?
Beta is a measure of volatility of a security price compared to another security or index’ price. For a beta to be meaningful, the security in focus should be related to the comparison benchmark security used in the calculation.

Longbow calculates beta for a security versus a broad market index; it represents the percentage price change of the security given a 1% change in the broad market index.

Beta effectively describes the activity of a security’s returns as it responds to swings in a comparison benchmark. A security’s beta is calculated by dividing the product of the covariance of the security’s returns and the benchmark’s returns by the variance of the benchmark’s returns over a specified period.

WHY DO WE WATCH IT?
Investors look at a security’s beta to understand whether a security moves in the same direction as its benchmark, or in the opposite direction. It also provides insights about how volatile–or how risky–a security is relative to the rest of the market or benchmark.

Ultimately, an investor is using beta to try to gauge how much risk a security may add to a portfolio. While a security that deviates very little from the market doesn’t add a lot of risk to a portfolio, it also doesn’t increase the potential for greater returns.

The beta of a market index versus itself would be 1.0, so a security’s beta greater than 1.0 would suggest its security price is more volatile than the market index and could rise or decline to a greater degree than the market. A security’s beta less than 1.0 would suggest its security price would move less than the market. A positive beta means that a security moves in the same direction as the benchmark, and a negative beta means that a security moves in the opposite direction.

HOW DO WE USE IT?
Longbow displays the beta of a security so that users may consider the data point, along with other key data points, before making a trading decision.

An investor would want to consider (i) the sign of the beta, and (ii) its magnitude when deciding to buy/sell/hold a security, and the size of any trade. Moreover, an investor would want to consider how a security’s beta may change the risk and return potential of an overall portfolio post a proposed trade.

WHAT IS IT?
Longbow often labels signals with the terms Bullish, Bearish and Neutral. Bullish refers to data points that are increasing or improving, such as an upward trend of an increasing stock price. Bearish refers to the opposite: data points that are decreasing or worsening, such as a downward trend of a decreasing stock price. Neutral suggests that there is not a definitive trend or signal.

HOW DO WE USE IT?
Longbow often labels signals with the terms Bullish, Bearish and Neutral to help put numbers and trends into context. The labels quickly identify for investors the pattern of discussed data points.

WHAT IS IT?
Longbow’s Core Signal leverages decades of investment and trading experience into one “Core” signal. This proprietary signal incorporates a number of key trading statistics and thresholds into one actionable signal of Buy, Sell, or Hold.

Longbow considers the math behind its Core Signal its “secret sauce” and does not divulge which trading statistics it uses, how it weights the various statistics and key thresholds embedded in the signal, or why the same statistic could have a different impact on two security’s core signals.

WHY DO WE WATCH IT?
Investors watch a security’s Longbow Core Signal because it incorporates many key statistics into one overall signal, for timely analysis and decision-making. Longbow does the hard work for investors and summarizes the “so what?” in one signal. Longbow understands that making successful trading decisions on a consistent basis is not easy. Using The Longbow Dashboard, investors are able to view summary trading signals as well as detailed data driving these signals.

HOW DO WE USE IT?
Longbow uses the Longbow Core Signal as a quick flag for investors who visually want to see an overall signal on a security.

WHAT IS IT?
Sometimes the math gives a recommendation, yet Longbow seeks to understand the strength, or conviction, behind that recommendation. Longbow’s proprietary Core Signal Strength identifies a conviction level for the Longbow Core Signal by analyzing the magnitude and alignment of the key trading statistics driving the signal.

The Signal Strength uses both color and the number of bars to demonstrate a conviction level. For example, five full green bars represent a high conviction level for a Buy/Cover signal, whereas just one red bar represents a low conviction level for a Sell/Short signal. Neutral signals are shown in grey.

WHY DO WE WATCH IT?
Longbow provides a Core Signal Strength to put the Core Signal in context. Is it a strong signal with full bars? Or a weak signal with one-half of a bar? Investors may gain greater conviction around a Longbow Core Signal flag if it has a strong Longbow Core Signal Strength, versus a Longbow Core Signal flag with a weak Longbow Core Signal Strength.

HOW DO WE USE IT?
Investors use the visual gauge of a Longbow Core Signal Strength to determine a conviction level around the Longbow Core Signal for a given security. The Signal Strength uses both color and the number of bars to demonstrate a conviction level.

  • A 5-bar Core Signal Strength means that the signal strength for the core signal is very high, and a low/no bar means that the core signal strength is very low.
  • These bars turn green when there is a BUY signal, and they turn red when there is a SELL signal. They remain white when there is a HOLD signal.
  • While we don’t give out the entire calculation, it takes into account (i) whether the price is above/below the Trading Range, (ii) whether there is an IVOL prem/discount that is aligned with that signal (e.g., IVOL premium on a stock trading below the low end of the trading range), and (iii) whether the stock’s momentum lines are in alignment (e.g., bullish Short Term and Medium Term Momentum signals for a stock trading below the low end of the Trading Range among a few other variables.
  • So, if a Closing Price is in between the Trading Range boundaries, the Core Signal Strength bars will be white.
  • WHAT IS IT?
    Longbow’s proprietary Trading Range is an estimated daily trading range for a publicly-traded security. The Trading Range specifies both a Low End and a High End security price, between which the security is likely to trade during the day. The Trading Range is derived from security-level price and volatility data on how a security has historically traded.

    There are various methods that investors use to determine “trading ranges” for a security –Rescaled Ranges, Bollinger Bands, Average Trading Ranges, and Keltner Channels to name just a few. Longbow’s proprietary Trading Range incorporates security price and volatility data over a statistically significant time period, weighting the more recent data over the older data while incorporating various volatility regimes associated with that security during that time period.

    Unlike Bollinger Bands, which maps ~2 standard deviations from a simple moving average or a Keltner Channel which uses an exponential moving average and an average true range in place of the Bollinger Band’s ~ 2 standard deviations, Longbow’s Trading Ranges use substantially more granular historical price data and volatility data to determine a higher probabilistic trading range for a security.

    Longbow’s dashboard shows the current Trading Range for each followed security, and it also shows the historical trading range for each security in the pop-up window when clients click on an individual ticker. There is a visual chart showing the actual security price versus both the Low End and High End of the Trading Range for the past year. Thus, investors can visually see how effective the Trading Range bands have been over time.

    WHY DO WE WATCH IT?
    Investors can use the Trading Range as a guide for timing trading decisions. It is a technical tool useful to investors, because it removes emotion out of trading decisions.

    HOW DO WE USE IT?
    Investors can use the Trading Range as a guide for timing trading decisions. If an investor is interested in buying a security, as the security’s price moves below the Low End of the Trading Range, it should be a more advantageous time to buy the security. If it is in the middle of the range or near the High End of the Trading Range, then it may be better to wait to buy the security. Investors can use the Trading Range for trims and sells as well. If a security is near or above the High End of a Trading Range, it should be a more advantageous time (technically speaking) to bring down the position. Investors who short can use the Buy signals for Covers, as well as the Sell signals for Shorts.

    Together with other data points and signals, the Trading Range becomes even more effective. This is why Longbow combines its Trading Range with other key data points and signals to derive its consolidated Core Signal. For example, if a security has a high Implied Volatility Premium, trades above Bullish Short Term and Medium Term Levels, yet trades below the Low End of the Trading Range with decelerating Volume, then there is a greater probability of a successful Buy trade. Similarly, if a security’s price and volume are increasing while its Volatility is decreasing, then over time that security’s Trading Range may narrow, with a higher likelihood of the security price going up; investors buying the security below/near the Low End of the Trading Range have a greater expected probability of success for the trade.

    WHAT IS IT?
    Longbow created a signal to identify where a security is trading versus the Low End and the High End of its Trading Range. The signal shows a green Buy if it is near or below the Low End of the Trading Range. The signal shows a grey Hold if the security is priced within the Trading Range. The signal shows a red Sell if the security is priced near or above the High End of the Trading Range.

    WHY DO WE WATCH IT?
    Investors watch the signal because it provides a simple, visual cue for investors to identify where the security is trading relative to the Trading Range boundaries.

    HOW DO WE USE IT?
    Investors use the Longbow Trading Range Signal as one input in deciding the potential asymmetry and actionability of a potential trade.

    WHAT IS IT?
    Longbow identifies numerically where a security is trading relative to the High End and Low End of the Trading Range. Investors can see, in percentage terms, how far the security would have to move up to hit the High End of the Trading Range (% from High) as well as how far the security would have to move down to hit the Low End of the Trading Range (% from Low). When a security is trading beyond the boundaries of the Trading Range, then these percentages will reflect that situation as well.

    WHY DO WE WATCH IT?
    Longbow likes to incorporate percentages because absolute security price levels are more difficult to put into context. Visually, it is easier to see the asymmetry of a Trading Range through the percent differences from the Trading Range boundaries, versus simple dollar differences from a security’s current price.

    HOW DO WE USE IT?
    Longbow users find it useful to look at the absolute percentage differences from the Trading Range boundaries, and they also find it useful to compare the two numbers. For example, investors may find it helpful to understand that a security has a potential 10% upside(% from High), or a -2% potential downside(% from Low), with regards the current Trading Range boundaries. Yet, it is also helpful to compare those two figures visually—obviously the number 10 is much greater than the number 2. Hence, both the absolute and the relative assessment more quickly assess a positive bullish asymmetry.

    WHAT IS IT?
    Odds represents the numerical comparison of two key Trading Range variables: the % from Low and the % from High. The ratio’s numerator is the one with the greatest potential move, and the denominator is the lowest potential move. The ratio’s sign depends on which figure is the greatest on an absolute basis. For example, the odds of a trade are a positive 2:1 if there is 10% potential upside to the High End of the Trading Range and -5% potential downside to the Low End of the Trading Range. The odds of a trade are a negative -2:1 if there is only 5% potential upside to the High End of the Trading Range a -10% potential downside to the Low End of the Trading Range. The corresponding arrow shown (up or down) reflects whether the Odds are greater to the upside versus the downside.

    WHY DO WE WATCH IT?
    When betting on sports or buying a lottery ticket, people like to understand their odds of winning and losing. The same is true for investors, so Longbow states the Odds for clients.

    HOW DO WE USE IT?
    Longbow uses the Odds to understand the magnitude and direction of the asymmetry of a potential price move to the high end and low end of the Longbow trading range. Investors are interested in understanding asymmetry, as it is a gauge of a potential return and the potential risk of a position.

    WHAT IS IT?
    Similar to the direction of the arrow shown for the Trading Range Odds (up or down), Longbow identifies the Asymmetry of the Trading Range for clients. It is Bullish when the asymmetry of a security’s price is to the upside in comparison to both boundaries of the trading range, and Bearish when the asymmetry is to the downside. If the arrow is pointing up, it is Bullish, and if it is pointing down, it is Bearish asymmetry.

    WHY DO WE WATCH IT?
    Investors watch the Asymmetry as a quick gauge for whether there is more upside or downside from a security’s current price, given trading range boundaries.

    HOW DO WE USE IT?
    Investors use Asymmetry as a visual cue and an element in decision-making for a trade. For example, if the Asymmetry of a potential trade is Bearish, an investor may think twice before buying the security and going long the position at that time. The investor may wait until the Asymmetry is Bullish, which would be aligned with the intended trade of a security purchase, believing that the security price should go up.

    WHAT IS IT?
    Longbow’s proprietary Trading Range is an estimated daily trading range for a publicly-traded security. The Trading Range specifies both a Low End and a High End security price, between which the security is likely to trade during the day. The Trading Range is derived from security-level data on how a security has actually traded, so Longbow calculates new Trading Ranges throughout the trading day.

    WHY DO WE WATCH IT?
    Over time, it is helpful to view whether (i) a Trading Range narrows or widens, and (ii) whether the Low End and the High End of the Trading Range are moving up or down.

    HOW DO WE USE IT?
    First, narrowing Trading Ranges signify greater conviction in the Trading Range itself, as the security continually is trading within the Trading Range boundaries; on the contrary, a widening Trading Range typically signifies that there is less conviction in the Trading Range going forward, so the security’s price may move to a greater degree than before.

    Second, analyzing the movement of the Low End and High End boundaries of the Trading Range can provide insights as well. If the Low End of a Trading Range continues to move up, then there is a higher likelihood that the security price will increase; conversely, if the Low End of a Trading Range continues to move down, then there is a higher likelihood that the security price will decrease.

    Longbow summarizes moves in the Trading Range boundaries within the KISS (Keep It Simple) view. Longbow identifies if the Low End is moving Higher/Neutral/Lower and provides similar detail for the High End of the Trading Range. Plus, Longbow’s dashboard shows the historical trading range for each security in the pop-up window when clients click on an individual ticker. There is a visual chart showing the actual security price versus both the Low End and High End of the Trading Range for the past year. Thus, investors can visually see how the Low End and the High End of the Trading Range have moved over time.

    WHAT IS IT?
    Longbow recognizes that investment risk is non-linear, which means that risk can happen fast, slow, and episodically. There is no one pattern for risk. Thus, Longbow analyzes data and signals over different time periods to get a better sense of risk. The team’s Momentum Indicators incorporate two key time periods (short term and medium term) to evaluate risk.

    By analyzing both the Short Term and the Medium Term, Longbow offers investors the ability to get a better sense of a security’s risk.

    Longbow’s Short Term duration measures risk over an immediate-term (30 day or less) basis. Short Term signals are useful for active trading decisions, and they are a good place to start when thinking about risk today. A security price’s movement within the past 30 days reflects a lot of current information, from macro shocks to company-specific news.

    The team’s Medium Term duration measures risk over an intermediate-term (great than 30 days, but less than 120 days) basis. Investors may gain greater insights into risk trends from a Medium Term duration, because short-term noise has less of an impact.

    WHY DO WE WATCH IT?
    By analyzing both the Short Term and the Medium Term, Longbow offers investors the ability to get a better sense of a security’s risk.

    HOW DO WE USE IT?
    Longbow uses the Momentum Indicators, in conjunction with other data and signals, in its Core Signal recommendation. Also, investors can use the Momentum Indicators on their own to flag when signals may remain in alignment, or when signals may point to a change in risk and price action of a security.

    SHORT TERM – SIGNAL AND LEVEL
    For the Short Term, Longbow provides both a Signal (Bullish/Neutral/Bearish) and a price level. The Short Term Momentum Level is a critical trading threshold around which a security’s price may move from bullish to neutral or bearish (or vice versa) on a short-term basis.

    The threshold is a numerical security price level that could signal a shift in sentiment and momentum. If there is a shift, then the Signal may change, for example from Bullish to Bearish. Plus, the security price may begin to move in a new direction. Thus, investors find it useful to compare the current security price with the Short Term Momentum Level. If a security price consistently stays above a Short Term Momentum Level, and its Short Term Momentum Signal remains Bullish, then the investor can have greater conviction using the Low End of the Trading Range to buy the security. However, if a security price “breaks” the level, and the Signal moves from Bullish to Neutral or Bearish, then it could be a sign that there may be a negative upcoming change in the Trading Range, so there would be less conviction around using the Low End of the Trading Range for a Buy signal. The investor may experience the Low End and the High End of the Trading Range move lower, driving more downside asymmetry from the current stock price.

    Conversely, if a security price “breaks” the level to the upside, and its Signal moves from Neutral or Bearish to Bullish, then it could be a sign that there may be a positive upcoming change in the Trading Range, so there would be a greater conviction around using the Low End of the Trading Range for a Buy signal. Moreover, the investor may experience the High End of the Trading Range move up as well, driving greater asymmetry from the current security price.

    MEDIUM TERM- SIGNAL AND LEVEL
    For the Medium Term, Longbow provides both a Signal (Bullish/Neutral/Bearish) and a price level. The Medium Term Momentum Level is a critical trading threshold around which a security’s price may move from bullish to neutral or bearish (or vice versa) on an intermediate-term basis.

    The threshold is a numerical security price level that could signal a shift in sentiment and momentum. If there is a shift, then the Signal may change, for example from Bullish to Bearish. Plus, the security price may begin to move in a new direction. Thus, investors find it useful to compare the current security price with the Medium Term Momentum Level. If a security price consistently stays above a Medium Term Momentum Level, and its Medium Term Momentum Signal remains Bullish, then the investor can have greater conviction using the Low End of the Trading Range to buy the security. However, if a security price “breaks” the level, and the Signal moves from Bullish to Neutral or Bearish, then it could be a sign that there may be a negative upcoming change in the Trading Range, so there would be less conviction around using the Low End of the Trading Range for a Buy signal. The investor may experience the Low End and the High End of the Trading Range move lower, driving more downside asymmetry from the current stock price.

    Conversely, if a security price “breaks” the level to the upside, and its Signal moves from Neutral or Bearish to Bullish, then it could be a sign that there may be a positive upcoming change in the Trading Range, so there would be a greater conviction around using the Low End of the Trading Range for a Buy signal. Moreover, the investor may experience the High End of the Trading Range move up as well, driving greater asymmetry from the current security price.

    By reviewing both the Medium Term and Short Term Signals and Levels, investors’ conviction levels around the Trading Ranges and signals can increase or decrease.

    WHAT IS IT?
    Short interest is the total number of shares investors have sold short but have not yet bought back. The number of shares sold short is a key input to one of the calculations Longbow shares on the dashboard so that investors can understand to what degree investors are betting against a company’s security price.

    Short interest as a percent of equity float is a key calculation Longbow offers, defined as the quotient of Short Interest divided by Equity Float x 100. Short interest is the total number of shares investors have sold short but have not yet bought back. Equity float is the number of shares that are available to the public to trade. Thus, the ratio tells us to what degree investors are shorting a company’s security.

    Longbow also provides a view into how short interest has changed over time, versus a security’s prior reporting period and versus its reported level one month ago.

    WHY DO WE WATCH IT?
    Investors look to the short interest levels, percentage of float, and percent changes to understand investor positioning of a security over time.

    HOW DO WE USE IT?
    If there is a high short interest, then positive news may force the short investors to cover their positions, driving up the security price to a greater degree than the positive news may have otherwise. Also, if there is a high short interest, then negative news may not drive the stock price down as much as the negative news otherwise would have, because many investors already had a bearish position on the security.

    Investors on Longbow also can see whether market participants have built greater or smaller short positions in a company’s security, which may influence stock price movements in the future. Most investors remember this lesson from GameStop in 2021, which had a high short interest level. As the security price moved up, investors who had shorted the position had to buy shares to cover their short position, driving the security price up even further, triggering more short sellers to buy shares to cover their short positions, and on and on.

    WHAT IS IT?
    Longbow displays investor positioning via the CFTC Commitments of Traders non-commercial data. Non-commercial investors include Wall Street traders betting on the future trajectory of an exposure—from an index like the S&P to currencies to commodities to US Treasury bonds. This compares to commercial data driven by commercial investors that endeavor to hedge out a business risk, such as input costs via hedging oil. Longbow provides net contract positioning so that investors can see the overall direction and magnitude of the market’s bet (long or short, and by how much). Moreover, Longbow provides historical context to the data, so that investors can understand how current positioning compares to prior market positioning.

    WHY DO WE WATCH IT?
    Understanding what is a consensus position versus a non-consensus or contrarian position—and to what degree—is important for investors. In general, making non-consensus, or contrarian, trades offers investors a greater asymmetry profile. This is because if consensus is right, most investors already are on that side of the trade, so the positive impact may be muted; however, if consensus is wrong, then many investors may have to unwind their positions, driving a greater positive impact for those who faded consensus with their positioning.

    HOW DO WE USE IT?
    Longbow seeks to identify where consensus positioning is—and to what degree—so that investors may consider what trade may offer the greatest asymmetry.

    Longbow users often look at the week over week changes in positioning. Have investors added to their positions meaningfully? Decreased them meaningfully? The week over week change signals how investors have changed their positioning, and to what degree.

    Longbow users also focus on a statistic Longbow displays that puts the investor positioning into historical context, called a Z-Score. It is the number of standard deviations above or below a mean positioning value for a security over a specified period of time, which in the case of Longbow’s dashboard is 1 year and 3 years.

    By analyzing the raw positioning data, investors can see whether consensus is net long or short the position. By analyzing the Z-Score, investors can identify the magnitude of that positioning. Typically, when Z-Scores are 1.5x a standard deviation in any direction (positive or negative), there is a greater probability that this positioning will reverse because it has become a consensus position. Thus, investors may consider placing the opposite trade, to take advantage of the asymmetry in their favor.

    WHAT IS IT?
    Longbow provides current and historical volatility data on a selection of exposures that includes: CBOE VOL, MOVE INDEX, 10YR UST NOTE VOL, JPM FX VOL, HIGH YIELD OAS, and BBB to 10 YR SPREAD.

    WHY DO WE WATCH IT?
    By analyzing cross-asset volatility, investors gain insight into financial market conditions overall. Although financial market analysis is limited by history, Longbow understands that history can rhyme and sometimes repeat. By reviewing a number of volatility measures across asset classes—hence the term cross-asset—investors may identify yellow flags, blue sky conditions, or further areas for analysis.

    WHAT IS IT?
    Longbow provides price performance data of the 11 sectors of the S&P 500.

    WHY DO WE WATCH IT?
    Longbow highlights price performance across S&P 500 sectors over time so that investors can identify (i) which sectors have positive and negative returns, and (ii) which sectors are outperforming and which sectors are underperforming on a relative basis to each other.

    HOW DO WE USE IT?
    Investors may find that trends are continuing (e.g., information technology companies’ stock prices have outperformed utility companies’ stock prices in the S&P over the past decade) or changing (e.g., energy prices have outperformed on a short-term basis versus all other sectors’ performance, after many years of underperformance relatively). These insights may spur investors to change sector exposures in their portfolio via adds/trims of positions or hedges.

    WHAT IS IT?
    Longbow highlights the price performance of the top and bottom quintile (20%) of various style factors within the S&P 500 over a range of time periods. Similar to evaluating sector performance on an absolute and a relative basis, Longbow investors may evaluate style factors on an absolute and a relative basis—and within each style factor given the emphasis on top and bottom quintiles of each style factor.

    WHY DO WE WATCH IT?
    Given the massive trend towards factor-based investing and the increase in systematic trading, it is important for investors to understand how style factors are performing. Systematic trading strategies can heighten the outperformance or underperformance of a style factor and cause severe changes in performance given that they account for over 90% of US equity trading volume, according to JP Morgan.

    HOW DO WE USE IT?
    Investors should evaluate their portfolios to understand the impact trading flows have on their performance, given related style factor exposures.

    WHAT IS IT?
    Longbow summarizes data on US market and exchange trading volume.

    WHY DO WE WATCH IT?
    Overall market trading volume is a technical indicator because it represents the overall activity of a market, which investors may use to confirm the existence, or a continuation, of a trend or a trend reversal.

    HOW DO WE USE IT?
    Longbow users focus on trading volume because it may signal and confirm momentum in a market, which they may use as a guide to buy into the market. Alternatively, low trading volume may signal when an investor should take profits or prepare for a reversal in momentum.

    WHAT IS IT?
    Because the US Dollar has been the world’s reserve currency, Longbow displays key correlations to the US Dollar over various time periods. Correlation is a statistical relationship that refers to the degree to which two things are related–positively or negatively as well as to the magnitude of the relationship.

    WHY DO WE WATCH IT?
    US Dollar Correlations are useful in determining whether patterns exist, and if they are continuing currently. For example, investors often expect that when the US Dollar rises, the value of gold falls. If this relationship changes in the short-term, investors may not be able to expect to use gold as a hedge, for example, for a depreciating US Dollar.

    HOW DO WE USE IT?
    Investors look at correlation to understand how two things change together without making a statement about why the relationship is occurring. At the extreme, a correlation coefficient of 1.0 would mean perfect positive correlation, a correlation coefficient of 0.0 would mean no correlation at all, and a correlation coefficient of -1.0 would mean perfect negative correlation.

    If investors have a forecast on what will happen with the US Dollar, then they may be able to create associated trades if there are strong correlations with other securities.

    WHAT IS IT?
    Longbow displays key interest rate figures as well as spreads of key interest rate figures (e.g., the difference between the UST 2 Year and 10 Year). Longbow provides the current level, the change in basis points over different time periods, a comparison to the 52-week high and low levels, as well as a comparison to the three-year and five-year average levels.

    WHY DO WE WATCH IT?
    Longbow users often analyze key interest rates and their movements because they impact securities’ valuation, securities’ pricing, and risk premium. While it usually takes at least 12 months for a change in the interest rate to have a widespread economic impact, the stock market’s response to a change is often more immediate. Interest rates influence the cost of borrowing, the return on savings, and potential future economic and financial market activity.

    HOW DO WE USE IT?
    Longbow users look at absolute rate levels, relative rate levels, and trends in how rate levels have changed over time. For example, when long-term interest rate levels are increasing, then bonds and bond-like securities (e.g., long-dated treasuries, consumer staples equities, utilities equities) may underperform relative to securities that tend to benefit when long-term interest rate levels are rising, such as financials equities including banks. There is an inverse relationship between bond prices and interest rates: as interest rates rise, bond prices fall (and vice versa). The longer the maturity of the bond, the more it fluctuates in accordance to changes in the interest rate.

    1. Market Momentum

    What it does: This indicator tracks how far the S&P 500 is above or below its 125-day moving average and compares it to historical data.

    Why it matters: The signal reveals whether investors have become more or less confident of market returns going forward.

    2. Market Strength

    What it does: This indicator compares the number of stocks hitting 52-week highs versus lows on a major US exchange.
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    Why it matters: When the delta is high, investors are confident about future market returns; when it is low, investors are concerned about future market returns.

    3. Market Breadth

    What it does: This indicator analyzes the volume of shares trading in stocks on the rise versus stocks on the decline.

    Why it matters: When the data point is low, it suggests market breadth is weak, and when it is high, it suggests market breadth is strong.

    4. Equity Put/Call Ratio

    What it does: This indicator compares the trading volume of bullish call options relative to the trading volume of bearish put options.

    Why it matters: The signal reveals investors’ optimism or pessimism and whether they expect security prices to rise or fall.

    5. Volatility

    What it does: This indicator measures the volatility of the S&P 500.

    Why it matters: A leading indicator of its future price, when the measurement is low, the probability of the future price going higher is greater.

    6. Junk Bond Demand

    What it does: This indicator analyzes the spread between yields on investment-grade bonds and junk bonds.

    Why it matters: When the spread is minimal, investors pursue higher-risk strategies; when the spread is more significant, investors require additional yield to take additional risk.

    7. Safe Haven Demand

    What it does: This indicator looks at the difference in returns for stocks versus US Treasuries.

    Why it matters: When investors are bidding up the prices for bonds versus stocks, they are seeking more defensive positioning, and when investors are bidding up stocks versus bonds, they are seeking more offensive positioning.

    8. Volatility Squared Signal

    What it does: This indicator looks at the ratio of VVIX to VIX, or the volatility of options on the volatility of the S&P 500 to the volatility of the S&P 500.

    Why it matters: By analyzing the ever-changing relationship between VVIX and VIX, this signal reveals the prevailing risk dynamic. Historically, the VVIX/VIX ratio tends to be lower during periods of extreme volatility and higher during periods of relative complacency.

    9. Global PMI Signal

    What it does: This indicator looks at the purchasing managers’ index (PMI), which provides information about current and future business conditions in the manufacturing and service sectors, and the growth patterns of the global PMI.

    Why it matters: When the global PMI is above 50, public markets may have a greater chance of positive returns, especially when the PMI is increasing, and when the global PMI is below 50, public markets may have a greater chance of negative returns, especially when the PMI is decreasing.

    10. Yield Inversion Signal

    What it does: This indicator reports the spread or yield curve between 10-year and 2-year US Treasuries and also adjusts its overall Doomsday Signal when the yield curve inverts.

    Why it matters: An inverted yield curve is a noteworthy and uncommon event because it suggests that the near-term is riskier than the long-term. It is often a leading indicator of an impending recession.

    11. Volatility Threshold Signal

    What it does: This indicator tracks well-known volatility data points — including the VIX, VXN, and OVX — consolidates the key data points, and adjusts its overall Doomsday Signal to reflect risk conditions.

    Why it matters: When these volatility data points reach specific levels, it signals a riskier market.