Investing 101

_Last update August 22 2023_

We love leading indicators, and we know you love them too. Today we introduce our Trough Probability Index. The index is a probabilistic gauge of how close we could be to a trough in the broad market.

A trough is the lowest point of the index’s local trading range, and would suggest prices might be trending higher in the future. Don’t forget that markets can still trend lower, due to changes in fundamentals and in the newsflow.

![trough](https://storage.googleapis.com/toggle-webcm-prod/https://storage.googleapis.com/toggle-webcm-prod/spx_countdown_trough_probability_92_09d9cf5b5b/spx_countdown_trough_probability_92_09d9cf5b5b.png)

We have observed that when this indicator crosses 95, there’s a statistically meaningful chance that S&P has reached a trough and could rally in the short term. The index has shown to be most successful with an initial holding period of 5 trading days, followed by a longer period of 20 or more days.  

The index is built on a risk-adjusted and time-adjusted calculation of the size of the recent market moves, and the S&P historically reacts after trending downwards for a certain period of time. 



We love generating leading indicators using Reflexivity's insight, and we know you love them too. Today we introduce our Trough Probability Index.

Trough Indicator

Reflexivity's Leading Indicators

_Last updated August 22 2023_

We love leading indicators, and we know you love them too. Today we introduce our Peak Probability Index. The index is a probabilistic gauge of how close we could be to a peak in the broad market.

A peak is the highest point of the index’s local trading range, and would suggest prices might need to cool down before seeing any further rally. Don’t forget, peaks can be readjusted if news, technicals or fundamentals suggest otherwise. 

![peak prob](https://storage.googleapis.com/toggle-webcm-prod/https://storage.googleapis.com/toggle-webcm-prod/spx_countdown_peak_probability_92_cd84375045/spx_countdown_peak_probability_92_cd84375045.png)

We have observed that when this indicator crosses 95, the probability that we could be at a peak in the market becomes statistically significant - and thus investors should watch out for downside. The index has proven to be successful, with an initial holding period of 8-10 trading days, followed by a longer period of 25 or more days. 

The index is built on a risk-adjusted and time-adjusted calculation of the size of the recent market moves, and how the S&P typically reacts after trending upwards for a certain period of time.


Peak Indicator

Trough Indicator