Market Regime & Trade Readiness At a Glance
Match your strategy to current market conditions
Just like real weather, markets cycle through different conditions. Some days are calm and predictable (range-bound). Other days are stormy and explosive (trending volatile). Using the wrong strategy in the wrong weather is like wearing a swimsuit in a blizzard.
This dashboard combines three proven metrics into one simple "regime classification" for each asset, so you know exactly what kind of market you're trading.
Research Credits: Built on volatility regime research by L. Ingber, Giacomo Toscano, and Yang-Ho Park.
1. Volatility Regime (VoV)
Measures how unstable volatility itself is. High VoV = unstable, explosive environment. Low VoV = stable, predictable moves. Based on volatility clustering research (Mandelbrot 1963, ARCH/GARCH models).
2. Trend Strength (Linear Regression)
Uses regression slope and R² to measure if price is moving in a clean direction or just chopping around. High slope + high R² = strong trend. Low R² = range-bound noise.
3. Momentum Heat (Scaled Returns)
Measures if recent moves are extended/overheated versus normal. Similar to time-series momentum research. Helps you avoid chasing exhausted moves.
Trending Calm: Clean uptrend or downtrend in stable volatility → Ideal for trend-following with tight stops
Trending Volatile: Strong trend in explosive volatility → Ride momentum, use wider stops, scale positions
Choppy Calm: Range-bound in stable volatility → Perfect for mean reversion, fade extremes
Choppy Volatile: No clear direction + unstable volatility → Dangerous, wait for clarity
Explosive Breakout: Volatility expanding with trend forming → Early momentum opportunity
Exhausted: Overheated momentum, crowded move → Take profits, tighten stops
1. Check Macro first: SPY, QQQ, GLD, VXX, BTC tell you the overall market regime
2. Look for alignment: When multiple indices show the same weather, conviction is higher
3. Match strategy to conditions: Use the "What to Do" guidance for each asset
4. Expand stocks: Only look at individual names after understanding macro context
5. View raw metrics: Click "View Raw Metrics" on any card to see the underlying calculations
This isn't fortune-telling. It's pattern recognition based on decades of academic research on how volatility, trends, and momentum behave in different market regimes.
RV Window: Days to calculate realized volatility (default: 20)
VoV Window: Days to calculate volatility-of-volatility (default: 30)
Trend Window: Days for trend regression analysis (default: 20)
Thresholds: VoV boundaries defining Calm vs Normal vs Volatile regimes
Larger windows = smoother but slower signals. Smaller windows = faster but noisier signals.