My Core Market Model has risen back above the zero line.
Here’s the chart:
The Takeaway: My Core Market Model brings together three key areas: breadth, liquidity, and sentiment.
Breadth looks at how many stocks are participating. I check things like 20-day highs and how many stocks are above their 50-day moving average.
Liquidity shows where money is moving. Are investors choosing stocks over bonds? Are high-yield bonds acting better than Treasuries? What’s the momentum in yields?
Sentiment measures positioning and fear. I watch NAAIM exposure, Investors Intelligence, and the VIX.
I don’t act on one piece of data. I combine them all, then smooth the result with a 5-day moving average.
It’s not a buy or sell tool. It’s a way to read the environment.
When the model is above zero, I treat it as a bullish backdrop… Below zero, it’s bearish.
Right now, the model is back above zero.
That’s an important market shift. It had been negative for the past 62 trading days. That stretch caught the bulk of the recent pullback.
If you followed just this model, you likely remained cautious during that time.
But what does this move back above the zero line mean?
It tells me that things are improving.
The weight of evidence is no longer bearish.
It doesn’t mean we go straight up from here. But it does suggest the environment is changing.
That’s how I use this model — not to predict, but to stay aligned with what’s actually happening.
Do you use a weight of the evidence approach in your trading?
Grant Hawkridge | Chief Aussie Operator, All Star Charts
PS. Need a full trading toolkit that actually helps you make moves? All Star Charts Premium gives you daily trade ideas, proprietary scans, and access to our entire analyst team. If you're serious about leveling up your strategy, start here.
If you find my content valuable, I would greatly appreciate it if you could share it with your friends, family, and colleagues. Your help in spreading the word is invaluable in supporting our work. Thank you to all of you who share!
