STEAMBOAT SPRINGS — Part-time Steamboat Springs resident Tim Quast is hoping his latest venture, Market Structure EDGE, LLC, will help give active investors an edge by incorporating market-structure signals when shaping their portfolio.
“This is a decision support platform by which we mean it helps people decide what they’re going to do if they trade or invest in U.S. equities, so U.S. stocks” said Quast, the new company’s CEO. “What is unique here is that the platform is predicated entirely on the rules that govern how stocks are handled when they’re traded in the marketplace. Market structure is a jargon term that we think of as the behavior of money behind price and volume.”
Market Structure Edge is the first quantitative decision-support software platform for active traders to incorporate market-structure signals for portfolio shaping. It was developed by the founders of ModernIR, the largest provider of quantitative equity-market analytics to U.S.-listed companies. The new tool bundles simple metrics to signal whether a stock price is statistically likely to rise or fall in the near-term.
“The 2020 viral pandemic’s singular effect on the U.S. stock market was to lay bare the disconnect between market form and function and fundamental valuation of shares,” Quast said. “You cannot trust stocks to follow historical principles for fair value. To solve that problem, our analytics platform measures where the U.S. stocks comprising 99.9% of market cap are at all times on the arc between oversold and overbought, giving active traders high-probability, near-term signals on tops and bottoms.”
Quast said few market participants consider how rules governing order routing, best execution and order protection affect trade execution.
“That’s arcane stuff,” Quast said. “But it’s the beating heart of today’s stock market, and it’s mathematical and predictive and a principal directional influence on stock-prices.”
The core EDGE metric is a proprietary algorithm reflecting behavioral change driving stock prices that offers trades a scale that ranks investments from oversold to overbought. A central tendency is that stocks that become overbought stop rising and stocks that are oversold stop falling, offering high-probability directional signals.
“So if you’re enamored, like the whole world is with Tesla, well, how do you know if Tesla is likely to rise or fall?” Quast said. “Well, that’s mathematically measurable.
“All stocks are somewhere between oversold and overbought at all times, and you’re better as an investor to buy things that are oversold because they’re more likely to rise,” Quast continued. “You don’t want to buy something that’s fully overbought, because it’s likely the probability is it will go down. So it’s good to know that in advance, and that’s the advantage that our platform offers.”
Investors can request a demonstration or request a free trial at marketstuctureedge.com. In addition to being CEO of Market Structure EDGE, Quast is also founder and president of ModernIR, the largest provider of quantitative equity market analytics to U.S.-listed public companies.
He is a nationally recognized market-structure expert whose quotes on trading have appeared in the Wall Street Journal, Bloomberg, Financial Times of London, Reuters, Dow Jones, the Denver Post and the New York Times. He also has appeared regularly on CNBC, and he submitted written testimony to the U.S. House Financial Services Committee on improving equity capital markets for public companies.
Quast currently splits his time between Denver where Modern IR is based and his second home in Steamboat.