Investing 101

_Last updated August 22 2023_

The Phase Shift indicator is generated by observing correlation regimes amid stocks. 

Correlation is the degree to which assets co-move. 

![phase shift ](https://storage.googleapis.com/toggle-webcm-prod/https://storage.googleapis.com/toggle-webcm-prod/spx_countdown_breadth_91_274db4b2f7/spx_countdown_breadth_91_274db4b2f7.png)

When correlation among stocks is high (prices are moving in a similar direction), it usually forewarns of downward moves in the market as a whole: when stocks crash, they crash all together and it can be useful to identify the early-moving bellwethers. 

On the other hand, little correlation among stocks is usually associated with healthy markets that trade on fundamentals. In general, this is a condition more common with upward-trending markets.

We observed when correlation among stocks is slow, the highest probability of a move up in the market could be observed within the next 10 trading days. On the other hand, when correlation is high, the maximum drawdown could be observed after the 10th trading day. In the case of low correlation, returns could start to rise again after the 10th trading day but when correlation is high, the ideal holding period is 15 trading days, nothing more. 


The market phase shift is our latest indicator, generated by observing correlation regimes amid stocks and the degree to which assets co-move. 

Market Phase Shift

Reflexivity's Leading Indicators

_Last updated August 22 2023_

The candle breadth indicator is generated based on assessing the dispersion of intraday moves across the 1,000 largest US stocks. 

![candle breadth](https://storage.googleapis.com/toggle-webcm-prod/https://storage.googleapis.com/toggle-webcm-prod/spx_candle_breadth_91_d490479cb1/spx_candle_breadth_91_d490479cb1.png)

Using machine learning, we look at how the shift in these candle patterns, specifically the change in their statistical momentums, and how that can predict price action in the overall market. 

The indicator can be used to indicate potential market peaks and troughs. A value greater than or equal to 95 shows the high probability that we could be at a peak, versus a value less than or equal to 5 might suggest a market trough.

The indicator has worked best for bullish episodes with a short horizon (~5 trading days) and bearish episodes have shown the most success with a 12 day trading horizon. For the bullish case, we could see returns start to rise 20 days forward too. 



Candle Breadth

Market Phase Shift