Most people trade based on "gut feel." When I first started looking for a data driven method, I only found Trends and Standard Deviations (the "average" movement of a stock). It is a good guiding method, but it has flaws: in a bad market, "low" can always go lower. To fix that, I built a custom engine that doesn't just look at price—it looks at Market Sentiment holistically. Think of it like having a weather satellite for the stock market. It doesn't predict the future, but it tells you exactly what the current "climate" is so you don’t get caught in a storm without an umbrella.
The Engine Behind
To keep us from making emotional mistakes, the engine uses three smart guardrails:
1. Automated Regime Detection The market has two modes: Bull and Bear. The engine automatically detects which "Regime" we are in. In a Bear regime, the engine gets "pickier," stopping us from "catching a falling knife" just because a price looks cheap.
2. The Safety Net Generic rules (like "buy if it drops 5%") are dangerous because some stocks are naturally wilder than others. The engine calculates Smart Buffers based on how a stock actually behaves. If a stock is calm, the buffer is tight; if it’s wild, the buffer widens. We only move when the "rubber band" is truly stretched to its limit.
3. The Mood Meter Instead of just one indicator, the engine performs Sentiment Synthesis. It checks if "Is the current price way too far away from where it usually are?", "Is the general direction of the market actually pointing up or down?" and "Are people buying/selling with real conviction right now?". This gives us a single "Mood Score" that tells us if Mr. Market is in a state of Euphoria (time to sell) or Panic (time to shop).
Reading the Signals: What the Dots Mean
Red Dot (Momentum Trim): Mr. Market is dancing on the tables. He’s over-excited, and prices are stretched too thin. This is usually a good time to "trim" or take some profits off the table.
Light Green Dot (Cautious Buy): Mr. Market is starting to worry. Prices are dipping into "bargain" territory, but we’re moving in slowly and carefully.
Bright Green Dot (Accumulation): Mr. Market is getting scared. This is a stronger signal to pick up more shares while others are hesitating.
Dark Green Dot (Crash Buy): Mr. Market is having a total meltdown. These dots are rare—they only appear when prices are irrationally low. It’s a "fire sale" moment.
ES3.SI – STI ETF
Mood (Euphoria/Optimism/Neutral/Fear/Panic)
SPY – State Street SPDR S&P 500 ETF
Mood (Neutral)
2800.HK
Mood (Neutral)
GLD – SPDR Gold Shares
Mood (Euphoria)
BND – Vanguard Total Bond Market ETF
Mood (Neutral)
TLT – iShares 20+ Year Treasury Bond
Mood (Neutral)
Trend (Bearish)
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