Investing 101

_Last update: Aug 22 2023_

As the name suggests, the aggregated indicator provides a unified view of all our leading indicators. The indicator works on a “hat trick” logic: it activates when at least 3 individual leading indicators are jointly active within the last 21 days - the idea being that a collation of several indicators expressing different aspects of the market can better gauge turning points.

![aggregated indicator](https://storage.googleapis.com/toggle-webcm-prod/https://storage.googleapis.com/toggle-webcm-prod/spx_aggregated_90_59b0cacd66/spx_aggregated_90_59b0cacd66.png)

As an example, if the TLI, Rangefinder and Peak indicators all hit their respective bearish thresholds, the Aggregated Indicator will post a negative “0” reading and a red arrow will be generated above. In the symmetric case, if 3 indicators are turning bullish together the Aggregate will shift to 100 and issue a blue arrow.

For red arrows, history has shown that the S&P 500 has reacted with the highest probability of success over a 10 day horizon before returns start to diminish. For blue arrows, history has shown that the S&P 500 sees rising returns, with the shortest holding period of 10 trading days after its activation. 

Most recently, the aggregated indicator successfully highlighted that the S&P 500 could see bearish price action in August and the index has fallen hard from its 2023 peak. 


As the name suggests, the aggregated indicator provides a unified view of all our leading indicators. The indicator works on a “hat trick” logic. 

Aggregated Indicator

Reflexivity's Leading Indicators

_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. 


Market Phase Shift

Aggregated Indicator