Practical Guide
How to Read the Alphameter
The Alphameter scores six cross-asset indicators into a single risk-on / neutral / risk-off verdict, updated twice daily.
The Alphameter Score
Market Score
Ranges from -100 to +100. Six cross-asset indicators — VIX, AUD/JPY, Copper/Gold, Bond Yields, Sector Rotation, and Dollar Strength — are combined into a single composite that classifies the current state as risk-on, neutral, or risk-off. This is the only regime score we surface on the dashboard.
Market Regime
The market score classifies into three regimes. Each regime has historically favoured different asset classes.
Risk-On
Score > +25Markets are confident. Growth assets tend to outperform: equities, small-caps, oil, copper, high-yield currencies. In backtesting, Oil annualised +47.7%, Copper +40.7%, and IWM +16% during risk-on periods.
Neutral
Score -25 to +25No clear direction. Most assets chop sideways. This is where crypto historically gets destroyed — Solana lost 90% cumulatively during neutral periods. The safest approach is reduced position sizing or cash.
Risk-Off
Score < -25Fear is elevated. Safe havens tend to outperform: gold, silver, long-term Treasuries, USD/JPY. Non-US indices (Nikkei, FTSE) have historically performed well here too — capital rotates out of overvalued US markets.
Asset Class Cheat Sheet
26 years of backtesting across 33 assets reveals clear regime preferences for each asset class. These are annualised returns from the full backtest.
International Equities
Non-US indices show a counterintuitive pattern: they often outperform during US risk-off. When US markets panic, capital rotates into relatively cheaper international markets.
| Index | Risk-On | Neutral | Risk-Off | Best In |
|---|---|---|---|---|
| Nikkei 225 | +6.1% | -3.8% | +14.3% | Risk-Off |
| FTSE 100 | +7.1% | +0.4% | +10.1% | Risk-Off |
| DAX | +20.0% | +2.1% | +4.8% | Risk-On |
| Hang Seng | +39.9% | -7.6% | +16.2% | Risk-On |
| ASX 200 | +10.6% | +2.5% | +12.4% | Risk-Off |
Forex
Currency pairs reveal the dollar cycle. Safe-haven currencies (JPY, CHF) strengthen in risk-off as capital flows to safety. Risk currencies (GBP, AUD) strengthen in risk-on.
| Pair | Risk-On | Neutral | Risk-Off | Pattern |
|---|---|---|---|---|
| EUR/USD | +5.1% | +8.1% | -9.7% | Dollar weakness in calm |
| USD/JPY | -3.8% | -4.0% | +9.3% | Yen safe haven |
| USD/CHF | -5.1% | -8.2% | +5.8% | Dollar beats franc in panic |
| GBP/USD | +6.6% | +2.1% | -2.2% | Risk-on currency |
| AUD/USD | +10.5% | +2.0% | -5.4% | Commodity risk currency |
Commodities
Commodities split into two camps: industrial metals follow growth (risk-on), while precious metals follow fear (risk-off). Oil is the most regime-sensitive asset in the entire universe.
| Asset | Risk-On | Neutral | Risk-Off | Best In |
|---|---|---|---|---|
| Oil (USO) | +47.7% | -1.1% | +0.7% | Risk-On |
| Copper (CPER) | +40.7% | +12.4% | -1.5% | Risk-On |
| Gold (GLD) | +14.3% | +8.6% | +17.4% | Risk-Off |
| Silver (SLV) | +22.7% | +11.9% | +31.8% | Risk-Off |
Bonds
All Treasury ETFs perform best in risk-off as expected. Longer duration means more sensitivity to the regime signal — and more drawdown risk if you get it wrong.
| ETF | Risk-On | Neutral | Risk-Off | Note |
|---|---|---|---|---|
| TLT (20Y+) | -5.4% | +2.3% | +7.3% | Most volatile, biggest moves |
| IEF (7-10Y) | -3.2% | +1.3% | +3.8% | Balanced duration |
| SHY (1-3Y) | -1.1% | -0.4% | +1.7% | Capital preservation |
What to Watch For
Score Direction Matters More Than Level
A market score of +15 that was +27 last week is very different from a score of +15 that was +5 last week. The trajectory tells you whether conditions are improving or deteriorating — the absolute number tells you where you are.
Exogenous Shocks Override Regimes
Wars, supply shocks, and black swan events can override normal regime relationships. The Iran conflict in 2026 pushed oil +43% during risk-off — the opposite of its historical pattern. When geopolitics drives a specific commodity, the regime signal for that asset becomes unreliable. The regime signal for other assets often remains intact.
Neutral Is Not Safe
The neutral regime is where most assets underperform and drawdowns are largest. 26 years of backtesting shows that crypto and small-caps get particularly punished during extended neutral periods. The absence of a signal is itself a signal — reduce exposure.
When Does It Update?
The Alphameter refreshes twice daily on trading days:
- 9:30 AM ET — NYSE open snapshot. Captures overnight moves and pre-market sentiment.
- Midnight UTC — End of day snapshot. Captures the full trading session and after-hours moves.
You can also trigger a manual refresh from the dashboard at any time.
Important Disclaimer
Market regime backtests use 30 years of data (1996-2026). Past performance does not guarantee future results. Regime relationships can break down during unprecedented events (wars, pandemics, structural market changes).
This guide is for informational and educational purposes only. It is not financial advice. The Alphameter is a quantitative model with inherent limitations. Always do your own research.