Market regimes are a predefined classification of trends based on their direction and strength
Positive Short-Term Market Health & Negative Mid-Term Market Health >>> Increasing Reward
Characteristics
Establishing uptrend. Positive biased market regime, characterized by high volatility. Prices show stronger signs of stabilization after an extended period of extreme negative trading days. The negative trend weakens as the broad market is getting back on track. This transition is causing increased volatility. Sentiment is typically fearful, leaving the market better positioned to react strongly to positive news flow. Given the fact that the longer-term oriented trend picture is still quite damaged, the recovery remains at risk of fading at some point in time. Thus, differentiating whether these gains mark the beginning of a new sustainable uptrend or are just the result of an oversold bounce remains a challenge in that regime. Please note that the Market Regime Gauge provides only a snapshot of current indicator signals and does not account for foreseeable signal shifts, divergences, or weak signal strength. For a more detailed view, we recommend monitoring our Short- to Long-Term Market Health Indicators and/or single indicator devlopments.
Behind Market Regimes:
Market regimes are a predefined classification of trends based on their direction and strength.
Our definition of market regimes is rooted in an extensive analysis and combination of multiple indicators across various categories (trend, trend quality, and sentiment, including dumb- and smart-money positioning) and timeframes.
In total, we have six predefined regimes ranging from ‘Very High Reward’ to ‘Very High Risk,’ each with its own distinct risk-reward characteristics.
A written assessment of relevant market indicators used to identify the Short- and Long-Term Market Regime of the S&P 500
Updated Sundays | Report based on data from 2025-04-17
Regime Demands Vigilance Amid Unfavorable Short-Term Outlook
In the past week, the Industrials sector experienced a 1.5% increase. Over the last month, it declined by 5.5%. Looking back over three months, the sector saw a decrease of 8.8%. However, over the course of a year, there was a 5% increase in the Industrials sector.
Short-Term Market Health
Currently, the short-term price trend of the Industrials sector is negative, as it has closed below the lower envelope line of the Trend Trader Index. This downward trajectory is further confirmed by the decreasing envelope lines of the Trend Trader Index, indicating lower highs and lower lows over a rolling 20-day period — a common signal of a negative price trend. Moreover, the momentum behind this downward movement is worrisome. Although the Modified MACD provides some support, the Advance/Decline 20-Day Momentum Indicator reflects negative readings. Consequently, the overall short-term price outlook for Industrials appears significantly bearish at present.
Currently, the quality of this short-term trend is signaling a high level of downside participation across the broad market. The Modified McClellan Oscillator Daily shows declining stocks gaining momentum over advancing ones. Similarly, the Modified McClellan Volume Oscillator Daily indicates declining volume outpacing advancing volume momentum. Equities experience negative volume flows according to the Upside-/Downside Volume Index Daily. The High-/Low Index Daily reveals the 5-day moving average of yearly new lows surpassing yearly new highs. Additionally, most stocks trade below their 20-day moving average (SMA 20), signaling a negative price trend. Moreover, the majority of stocks are below their 50-day moving average (SMA 50), indicating a negative price trend in the broad market. Notably, more stocks are hitting new yearly highs than dropping to new yearly lows based on the New Highs minus New Lows indicator. So in the end, the Industrials sector looks quite vulnerable to stronger disappointments. Even if we do not see potential declines ahead, with such weak trend quality readings, the upside potential of this sector also looks outright capped at the moment.
On the contrarian side, we can see that the more…
The Weekly Trend Report provides a thorough written assessment of relevant market indicators used to identify the Short- and Long-Term Market Regime of the underlying market.
Each report follows a structured decision-making process, offering clear step-by-step instructions and complete transparency on how market regimes are identified. The Short-Term Market Regime (for short-term traders) is constructed upon the combination of Short- to Mid-term Market Health, while the Long-Term Market Regime (for buy & hold oriented investors) is based on the combination of Mid- to Long-Term Market Health.
By regularly following our Weekly Trend Report, you’ll soon be able to interpret market trends and potential shifts based on our indicators with confidence.
To determine the market regime, we use dozens of indicator signals covering essential performance factors such as trend, trend quality, sentiment, and the positions of smart and dumb money.
Gauging trends through a systematic screening of signals from multiple indicators
The Indicator Dashboard provides a single, color-coded chart that displays the underlying signals from our individual market indicators for the Industrials (XLI) for the past weeks. The signals are organized by category and ranked by timeframe, making it easy to visually analyze market health conditions. Mouse over for more details.
The Flowchart shows key components utilized to identify current market regimes for the Industrials (XLI). Mouse over for detailed insights.
Trends are measured through a systematic screening of signals from multiple indicators.
Organized by type and timeframe, our indicators capture essential performance factors such as trend, trend quality (breadth), and sentiment (smart and dumb money positioning), enabling us to identify strong trending markets effectively.
This diversified approach minimizes the impact of noise in individual indicators and provides an unbiased and robust view of current market conditions.
For a deeper analysis, you can screen these single indicators on our Market Regime Indicators section.
Measuring signal positivity among trend, trend quality, and sentiment indicators across three different timeframes
The spider chart measures and aggregates signal positivity among our trend, trend quality and sentiment indicators across three different timeframes. Scores on a 0 to 100% scale represent signal positivity. Mouse over for more details.
The spider chart measures and aggregates signal positivity across three different timeframes. Scores on a 0 to 100% scale represent signal positivity. Mouse over for more details.
Determining Market Health:
Market Health Indicators measure signal positivity among all published trend, trend quality, and sentiment indicators across three different timeframes.
This diversified approach minimizes the limitations of individual indicators and provides an unbiased view of financial markets
Scores on a 0 to 100% scale denote signal positivity.
Values below 50% indicate a negative outlook, while those above 50% signal positive market health.
The chart illustrates the Market Health for the Industrials (XLI) over time and per timeframe. The first panel shows the Industrials (XLI), followed by three subsequent panels detailing Short-, Mid-, and Long-Term Market Health. Mouse over for more details.
The chart illustrates the Market Health for the Industrials (XLI) over time and per timeframe. The first panel shows the Industrials (XLI), followed by three subsequent panels detailing Short-, Mid-, and Long-Term Market Health. Mouse over for more details.
The Process Beyond Market Health Analysis
Market Health Indicators offer comprehensive insights into the market condition, integrating signals from trend, trend quality, and sentiment indicators. Scores ranging from 0 to 100% represent the overall positivity of signals within a specific timeframe.
Scores below 50% indicate a negative outlook, indicating potential market weaknesses. On the other hand, scores above 50% indicate positive market health, signaling favorable conditions.
By combining short- to mid-term and mid-term to long-term market health readings, the specific market regime is determined. The Short-Term Market Regime is built upon the combination of short- to mid-term market health, while the Long-Term Market Regime is based on the combination of mid- to long-term market health.
Below, you can observe the evolution of both short-term and long-term market regimes over the past 15 trading days.
Our curated selection of well-researched, highly reliable indicators analyze key performance drivers such as trend, trend quality (breadth), sentiment, and the positions of smart vs. dumb money.
In this section, we will provide you with detailed information about the signals of Trend Indicators, utilized to identify the direction of the market.
In addition to the indicators displayed, we also offer the following tools to help identify the trend direction:
In this section, we will provide detailed information about Trend Quality Indicators, which are used to identify the strength of the trend.
In addition to the indicators displayed, we also offer the following tools to help identify the trend quality:
In this section, we will provide you with detailed information about the signals of Sentiment Indicators, utilized to identify the greed and fear among market participants.
In addition to the indicators displayed, we also offer the following tools to help identify the greed and fear:
Want to know how this market regime analysis is specifically applied to the Industrials (XLI)? Below, you’ll find our Market Regime Newsletters where we apply our market regime analysis specifically tailored to this market.
Our Market Regime Newsletter provides a brief glimpse into our evidence-based research methodology, showcasing how our indicators and tools can effectively identify compelling investment opportunities and risk factors. With a consistent top-down research approach, the newsletter offers valuable insights into our market research methodology.
In addition to the analysis for the Industrials (XLI), our services and tools also provide detailed trend analysis for 25 other markets.
Asia Pacific
Emerging Markets:
You are currently viewing a placeholder content from X. To access the actual content, click the button below. Please note that doing so will share data with third-party providers.
More InformationFREE MARKET RESEARCH
Only This Weekend!
10 May 12:00 PM – 13 May 12:00 PM (CET)
No Credit Card Needed
This weekend, all our free members with a Basic plan will have full access to premium content.
FREE MARKET RESEARCH
Only This Weekend!
12 April 12:00h – 15 April 12:00h (CET)
No Credit Card Needed
This weekend, all our free members with a Basic plan will have full access to premium content.
Please note that the content and charts are delayed and only up-to-date in our premium version. This page is primarily for demonstration purposes, showcasing how you can analyze market trends using our indicators and tools.
Please upgrade your membership to fully unlock your path to success.
