Methodology | Regime Stack™

The idea

No single indicator tells the whole story. The Scorecard stacks six common, well-understood market signals and adds them up. When most of them agree, the regime is clear. When they disagree, the Scorecard says so.

Scoring

Each of the six signals scores +1 (supportive), 0 (neutral) or −1 (weak).
The six scores are added for a total between −6 and +6.

Risk-OnTotal of +3 or higher

CautiousTotal from −2 to +2

Risk-OffTotal of −3 or lower

The trend guardrail

If SPY (the S&P 500 ETF) closes below its 200-day moving average, the regime cannot be Risk-On. Any Risk-On reading is capped at Cautious. A strong short-term bounce inside a long-term downtrend is treated with care.

The six signals

Signal	What it measures
S&P 500 trend (SPY)	Where the S&P 500 ETF sits relative to its 50-day and 200-day moving averages.
Nasdaq-100 trend (QQQ)	The same trend read for the Nasdaq-100 ETF, the growth and tech-heavy side of the market.
Breadth: % above 50-day	The share of S&P 500 stocks trading above their own 50-day average. Are most stocks participating?
McClellan Oscillator	A momentum gauge built from daily advancing versus declining issues.
Volatility (VIX)	The market’s expected volatility. Calm, normal or stressed.
Sector participation	How many of the 11 S&P 500 sectors are trading above their 50-day average.

Data

Market data comes from Yahoo Finance and is calculated from daily closing values. Data may be delayed, revised or occasionally wrong.

What the method is, and isn’t

Mechanical. The score comes straight from the rules. No discretion, no judgment calls.
Not optimized. Thresholds are set to sensible, conventional levels, not tuned to fit past data.
Not back-tested. No historical performance is claimed or implied.
Descriptive. It describes current conditions. It does not predict the future or tell anyone what to do.

See the disclaimer for important limits on how this information should be used.