The thesis
The idea behind news-sentiment is simple and intuitive: buy names showing positive recent news sentiment and exit when sentiment turns negative. It operates over a 24-name large-cap universe spanning tech, financials, healthcare, staples, and energy — AAPL, MSFT, GOOGL, NVDA, JPM, V, JNJ, XOM, and others. It is currently flagged live.
Recent activity
The last week of scheduled runs tells a consistent story: the strategy mostly stays on the sidelines. Across six runs from July 7 to July 14, it executed zero trades, rejecting a candidate on three of those days. The paper account sits at roughly $10,037 total value with $990.06 in cash — meaning it is nearly fully invested from earlier positions and is not adding on.
Those earlier positions came in a cluster from late May through early July: buys in AAPL (6 @ $312.06), MSFT (4 @ $428.23), BAC (35 @ $55.93), UNH (4 @ $402.85), and GOOGL (5 @ $360.40). Since then, the engine has found little it wants to act on — a directly observable expression of its exit-on-negative, buy-on-positive gating.
Backtest and validation
Here is where enthusiasm should cool. Over a 451-day backtest, news-sentiment returned 0.19% total (roughly 0.1% CAGR), ending at $10,018.55. Sharpe was 0.74, max drawdown a shallow 0.05%, and turnover 36.53%. The catch: this came from only 2 trades, with a reported win rate of 0 and $2 in total fees. That is an extraordinarily thin sample — the return is essentially flat, and two trades cannot support any confident claim of skill.
The walk-forward validation makes the point sharper. It did not pass. Of four folds, only the final one (Dec 2025–May 2026) was active at all — the first three produced zero return, zero Sharpe, and zero trades. Everything the strategy "earned" (0.19%, Sharpe 1.5 out-of-sample) came from a single fold with two trades. The probabilistic Sharpe ratio (PSR) reads a healthy 0.923, but the deflated Sharpe ratio (DSR), which penalizes multiple trials, drops to 0.551 across six trials — consistent with the failed verdict.
Balanced read
Strengths: discipline and capital preservation. A 0.05% drawdown and a refusal to force trades mean it is not bleeding capital or chasing noise. When it does act, it concentrates in liquid large caps.
Risks: the edge is unproven. Three of four folds never traded, so the strategy is effectively untested across most market regimes, and its entire track record rests on two fills. Until it demonstrates a repeatable signal across more folds and more trades, treat news-sentiment as a promising-but-inconclusive candidate — not a validated performer.