Aggregate Bull & Bear Index
Educational Overview
Multi-factor contrarian sentiment framework measuring market psychology through six proprietary components. Buy fear, hedge greed. Systematic approach to exploiting emotional market extremes.
Contrarian Sentiment Strategy
The Aggregate Bull and Bear Index (ABBI) measures market sentiment through a proprietary multi-factor framework producing values from 0 to 10. Lower values indicate extreme fear representing contrarian buying opportunities while higher values signal extreme greed warranting defensive positioning.
The indicator operates on a contrarian philosophy grounded in behavioral finance research. When market participants become uniformly bullish, marginal buyers become exhausted and probability of price declines increases. Conversely, when pessimism reaches extreme levels, forced selling creates attractive entry points for patient capital.
The strategy has demonstrated exceptional performance over 45 years since 1980, achieving a 79.2% win rate while generating 4475% cumulative returns. ABBI quantifies psychological states to help investors recognize emotional extremes and act against natural psychological impulses.
Historical Performance
Cumulative returns from 1980 to 2025 (backtested)
Past performance does not guarantee future results. For educational purposes only.
Performance by Year
Detailed breakdown of yearly returns showing consistency across 45 years of market cycles
Positive Years
Profitable trading years
Best Year
Highest annual return
Worst Year
Lowest annual return
Annual Returns Overview
Year-by-Year Performance
Returns calculated from cumulative performance data. All figures are net of costs and represent backtested results.
Why ABBI Works
Six key advantages of contrarian sentiment analysis for systematic market timing
Exceptional Returns
Cumulative Return
Over 45 years of backtested data, ABBI's contrarian approach generated extraordinary cumulative returns by systematically buying fear and hedging greed.
Consistent Win Rate
Winning Trades
216 trades across 45 years with a 79.2% win rate demonstrates the statistical edge of contrarian positioning during sentiment extremes.
Six-Component Framework
Sentiment Components
ABBI synthesizes institutional flows, credit conditions, hedging activity, speculator sentiment, market breadth, and cross-asset risk appetite.
Contrarian Philosophy
Fear to Greed Scale
Buy when the index drops below 2 (extreme fear), exit when it rises above 6 (greed). Classic contrarian logic validated across six decades.
Academic Foundation
Finance Research
Based on research by Baker & Wurgler, De Bondt & Thaler, and Kahneman & Tversky on investor sentiment and market overreaction.
Longest Track Record
Total Trades
45 years of market history including multiple recessions, crises, bull and bear markets from 1980 to 2025.
Core Framework
Three pillars of contrarian sentiment analysis combining multi-factor measurement, behavioral exploitation, and systematic execution
Scientific Foundation
Six proprietary components measuring different aspects of market psychology through advanced statistical processing.
- Institutional flow dynamics
- Credit market conditions
- Hedging activity metrics
- Speculator sentiment
Professional Implementation
Systematic exploitation of documented behavioral biases that create recurring opportunities at sentiment extremes.
- Extrapolation bias
- Herding behavior
- Overreaction effects
- Disposition effects
Practical Applications
Clear entry and exit signals at sentiment extremes with consensus filtering for signal quality.
- Entry threshold: 2.0 (Fear)
- Exit threshold: 6.0 (Greed)
- Dynamic threshold option
- Anti-repaint protection
Empirical Results
Performance metrics showcasing ABBI's effectiveness as a contrarian sentiment strategy
Win Rate
Percentage of profitable trades
Total Return
Cumulative performance since 1980
Total Trades
Signals across 45 years
Years
Longest validated backtest
Risk-Adjusted Performance Analysis
Historical Statistics
Risk Management
Important: Performance metrics based on historical S&P 500 analysis from 1980-2025. ABBI operates on contrarian principles, buying during extreme fear and hedging during extreme greed. The strategy may experience significant interim drawdowns when purchasing during market declines. Past performance does not guarantee future results.
Research Background
ABBI builds upon decades of peer-reviewed research in behavioral finance and market psychology
The theoretical foundation rests on seminal works by Baker & Wurgler (2006) on investor sentiment, De Bondt & Thaler (1985) on market overreaction, and Kahneman & Tversky (1979) on prospect theory. These studies demonstrate the cyclical nature of market psychology and its measurable impact on asset prices.
Recent advances by Stambaugh, Yu & Yuan (2012) provide empirical frameworks for quantifying sentiment effects, while Huang et al. (2015) demonstrate the predictive power of aligned sentiment measures for stock returns.
ABBI synthesizes these research streams into a practical framework that maintains academic rigor while providing actionable signals for professional portfolio management and systematic contrarian strategies.
Ready to Master Sentiment Extremes?
Get ABBI Professional with six-component framework, dynamic thresholds, and comprehensive sentiment analysis. Built for investors seeking to exploit emotional market extremes with systematic discipline.