1127.79 -0.72 (-0.06%) Sell

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BANK THEME is a falling knife, continues to bleed every investor trying to catch it

14 min read

Bank has destroyed investor wealth today. It fell by -0.06% to close at 1127.79. It's recent 5 day performance has been -0.92%, -1.02%, -0.36%, +1.21% and -0.83%.

[Theme constituents]

~BANK is currently in a bearish trend. Over the last three months 2 bearish signals have generated a profit of +11.55% for investors.


~BANK has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 1 Feb, 2018 to 11 Dec, 2018. Over the last 2 years 11 months and 14 days, ~BANK underperformed the SP500 index on 50% days. Which indicates that on days ~BANK underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ~BANK was mostly loss making and delivered on average -0.26% per day. It's best return during this period (of +1.72%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -3.29%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 29 Oct, 2018 and went on till 7 Nov, 2018. This bullish trend returned +5.87% to investors.

During the last year ~BANK had 4 profitable months and 8 loss making months. ~BANK returned profits in fewer months than SP500 index. ~BANK was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -8.64% compared to -7.75% returned by SP500 index in Dec 2018. ~BANK had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -9.58%. It is interesting to note that both ~BANK and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Money is like manure. You have to spread it around or it smells.

~BANK is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in ~BANK's volatility from 19 Sep, 2018 to 8 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ~BANK has significant positive skewness in it's return distribution. This indicates that investors can expect ~BANK to recover from drawdowns quickly. Which makes ~BANK a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than ~BANK. Therefore, SP500 must receive a lower allocation than ~BANK in your portfolio. SP500 index usually has shorter drawdown period than ~BANK.

Based on your interest in ~BANK you may find it interesting to know that ZBRA, BURL and AAXN are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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