Regime prediction — character (calm · trending · volatile) × direction (bull · bear) — scored against next-day SPY returns.
Today's session shows a meaningful reversal from the prior bearish regime. Broad equity strength across all major indices with tech leading suggests buyers stepped in. Credit markets are participating with both high-yield and investment-grade bonds posting gains alongside equities — a constructive risk-on signal. The sharp oil selloff actually removes some stagflation concern that was weighing on sentiment. However, VIX term structure remains in backwardation and implied volatility is elevated, suggesting the market expects continued movement. This looks like a relief rally within a still-uncertain environment rather than a decisive regime shift.
Cautious long bias with tight stops — today's strength is constructive but the elevated volatility regime and backwardated term structure suggest this could reverse quickly. Favor quality large-caps over small-caps given narrow breadth.
If tomorrow sees renewed selling with credit spreads widening and small-caps leading downside, today's rally was a dead-cat bounce within the bearish regime.
0 of 4 regions diverging from US
| +1d | +3d | +5d | |
|---|---|---|---|
| Calm | 33.3%(3) | 33.3%(3) | 33.3%(3) |
| Trending | 75%(8) | 38.5%(13) | 100%(11) |
| Volatile | — | — | — |
| Total | 63.6%(11) | 37.5%(16) | 85.7%(14) |
| +1d | +3d | +5d | |
|---|---|---|---|
| Bullish | 100%(1) | 100%(1) | 100%(1) |
| Bearish | 60%(10) | 100%(15) | 100%(13) |
| Neutral | — | — | — |
| Total | 63.6%(11) | 100%(16) | 100%(14) |