Market Weather

What Market Weather is

Before any single trade is considered, the system takes a read of the whole environment it's trading into — the same way a sailor checks the weather before leaving harbour. The Market Weather card on your Market page packs that read into one place: the overall regime, how healthy the economic backdrop is, where we are in the business cycle, and how dangerous it is to buy a dip right now.

The guiding idea is one sentence: only lean in with the tailwind, and only when a dip is a dip — not a falling knife. Market Weather is the dashboard for that idea.

Regime — the mood of the market

The regime is a single word for the market's current character. There are four, plus an "unknown":

• ·Euphoric — running hot and stretched. Momentum is strong, but the risk of a sharp reversal is rising. A backdrop to take profits into, not to chase.
• ·Normal — orderly, trending conditions with no extreme stress. The standard backdrop the strategies are built for.
• ·Bottoming — carving out a base after a sell-off. Selling pressure is easing, which is the backdrop where buying a beaten-down dip tends to work best.
• ·Free fall — a fast, broad decline with elevated stress. Catching falling knives is dangerous here, so this is the backdrop most likely to keep new entries on the bench.
• ·Unknown— the regime can't be read from current feeds. No read is applied; it never blocks anything.

Macro Health — a 0-to-10 safety read

Macro Health is a single 0-to-10 score for how supportive the broad economic backdrop is. Higher is safer — a stronger tailwind for taking risk; lower means a more cautious backdrop. As a rough guide, 7 and above reads as healthy, 4 to 7 as mixed, and below 4 as stressed.

It's a weighted blend of a few things that, together, describe how much stress is in the system: credit conditions, market volatility, the shape of the yield curve, the strength of the dollar, and overall liquidity. No single one of those decides it — the score is the combined picture, so a wobble in one place doesn't swing the whole read.

Business Cycle — where we are on the clock

Economies move through a repeating cycle, and different sectors do well at different points on that clock. The cycle phase tells you roughly where we are:

• ·Early cycle — recovering off a low base, with growth accelerating. Cyclical, risk-on sectors typically lead.
• ·Mid cycle — steady expansion. The broadest, most durable phase, where most sectors participate and trends are reliable.
• ·Late cycle — growth is mature and inflation pressure builds. Defensive and real-asset sectors tend to hold up better as the expansion ages.
• ·Recession — the economy is contracting. Risk appetite is low; capital preservation comes first.

Knife Risk — is this dip a buy, or a falling knife?

This is the heart of the "don't catch a falling knife" idea. When something has sold off and looks oversold, there are two very different possibilities: it's an orderly pullback worth buying, or it's the middle of a sharp slide that could keep falling. Knife Risk is the system's read on which one you're looking at, scored as low, elevated, or high:

• ·Low — pullbacks look orderly. Buying a dip carries normal risk.
• ·Elevated — choppy. A dip could keep falling, so any entry should be sized with extra care.
• ·High — a sharp slide is underway. Buying the dip here risks catching a falling knife.

Knife Risk is shown per timeframe— and the reading can differ across them. That's deliberate. A pullback can look calm on a slower, bigger-picture view while a near-term shock — an event, a headline, a gap — makes the same name dangerous to touch over the next few hours. Splitting it by timeframe lets you see where the danger actually sits instead of averaging it away.

How to use it

Glance at Market Weather across your trading sessions to stay aware of the backdrop. A normal or bottoming regime, a healthy macro reading, and low knife-risk together describe a clear runway. A free-fall regime, a stressed score, or high knife-risk explain why the system might be sitting on its hands — that caution is deliberate, not a malfunction.

Where you see this in the app

The Market Weather card lives on your Market Conditions page, alongside the volatility and event-calendar tiles. For how a vetted idea becomes — or doesn't become — an actual trade, see How Opportunities Are Vetted and Reading the Signals.