MACRO REGIME GUIDE
Master daily fundamental analysis and long-term market trends
What is the Macro Regime?
The Macro Regime is an AI-powered fundamental analysis system that classifies the overall economic environment daily into Risk-On, Neutral, or Risk-Off states. Unlike the hourly Risk Regime that focuses on short-term sentiment, the Macro Regime analyzes fundamental economic indicators including Fed policy, inflation trends, employment data, GDP growth, and market stress to provide a long-term view of market conditions.
INFO
Macro Regime vs Risk Regime
Understanding the difference between these two indicators is crucial for comprehensive market analysis.
COMPARISON TABLE
Key differences between the two regime systems
Understanding Macro Regime Types
The macro environment is classified into three states based on fundamental economic conditions.
Economic fundamentals are supportive of risk assets. Fed policy is accommodative or neutral, inflation is under control, employment is strong, and GDP is growing. This environment typically favors crypto, growth stocks, and higher-risk investments.
Mixed economic signals without clear directional bias. Some indicators are positive while others are negative. This typically occurs during economic transitions or when data is conflicting.
Economic fundamentals are deteriorating or concerning. Fed is hawkish, inflation is elevated, employment is weakening, or GDP is contracting. This environment favors defensive positioning, cash, and safe-haven assets.
Macro Regime Components
The macro regime score is calculated from five fundamental economic components, each capturing different aspects of the economic environment.
Fed Policy Score
Analyzes Federal Reserve monetary policy stance, interest rate trajectory, and forward guidance. Considers recent Fed statements, dot plots, and policy actions.
Inflation Score
Tracks inflation trends using CPI, PPI, PCE, and other price indices. Considers both headline and core measures, as well as inflation expectations.
Employment Score
Evaluates labor market health through NFP, unemployment rate, jobless claims, JOLTS, and wage growth data.
GDP Growth Score
Assesses economic growth through GDP reports, leading indicators, PMI data, and economic activity measures.
Market Stress Score
Monitors financial system stress through credit spreads, volatility indices, liquidity conditions, and risk asset correlations.
AI-Powered Analysis
Each day, our AI generates a comprehensive analysis explaining the current macro regime, key drivers, and implications for markets. The analysis includes a headline summary, detailed narrative, and identification of the most important bullish and bearish factors. This AI analysis synthesizes complex economic data into actionable insights.
AI ANALYSIS EXAMPLE
Daily generated macro insights
"Fed pivot expectations rise as inflation cools, supporting risk-on macro environment"
Understanding Bullish & Bearish Drivers
The system identifies and ranks the most significant factors pushing the market in each direction.
Bullish drivers are positive fundamental factors supporting risk assets. These might include Fed rate cuts, falling inflation, strong employment, or improving economic data. Each driver shows its category and impact score.
Bearish drivers are negative fundamental factors weighing on risk assets. These might include Fed hawkishness, rising inflation, weakening employment, or deteriorating economic data. Understanding both sides helps assess the balance of risks.
Reading the Charts
The Macro Regime page displays a dual-axis chart showing BTC price overlaid with the macro regime score over time. Color-coded backgrounds indicate the regime state: green for risk-on, gray for neutral, and red for risk-off. Use longer time frames (30-365 days) to identify macro trends and correlations between fundamentals and price.
CHART EXAMPLE
BTC price vs Macro Regime score
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Selecting Time Ranges
Choose from multiple time ranges for macro analysis: 7 days for recent changes, 30 days for monthly trends, 90 days for quarterly patterns, 6 months for intermediate trends, or 1 year for full cycle analysis. Longer time ranges reveal the relationship between macro fundamentals and major market moves.
TIME RANGE SELECTOR
Macro analysis timeframes
Component Statistics
The component statistics section shows detailed metrics for each fundamental factor including current value, trend direction (improving/stable/deteriorating), average over the period, and min/max range. This helps you understand which components are driving the regime and how they are evolving.
COMPONENT STATISTICS
Detailed metrics for each factor
Trading with Macro Regimes
Align your long-term positioning with the prevailing macro environment for better risk-adjusted returns.
Macro Risk-On Strategies
Increase allocation to risk assets - crypto, growth stocks, high-beta positions
Consider longer holding periods as fundamentals support prices
Use pullbacks as buying opportunities rather than exit signals
Focus on higher-conviction positions with larger size
Reduce cash and defensive holdings
Look for sectors benefiting from economic expansion
Macro Neutral Strategies
Maintain balanced allocation between risk and defensive assets
Be selective with new positions - wait for clearer signals
Focus on quality over quantity in portfolio construction
Consider range-bound strategies as markets await direction
Monitor component trends for early signs of regime change
Keep some dry powder for opportunities in either direction
Macro Risk-Off Strategies
Reduce exposure to risk assets and increase defensive positions
Raise cash levels and consider stablecoins for crypto portfolios
Focus on capital preservation over growth
Use rallies to reduce risk rather than add
Consider hedging strategies for remaining positions
Be patient - macro risk-off periods can last months
WARNING
Frequently Asked Questions
How often is the macro regime updated?
The macro regime is calculated daily after major economic data releases. Updates typically occur in the morning after overnight data is processed. The system incorporates the latest Fed communications, economic releases, and market conditions.
How is macro regime different from risk regime?
Risk regime is hourly and based on price/sentiment (BTC, SPY, VIX). Macro regime is daily and based on fundamentals (Fed, inflation, employment, GDP). Use risk regime for trading timing and macro regime for portfolio allocation.
Which components matter most?
Fed policy and inflation typically have the largest impact on overall regime. However, the relative importance changes over time. During Fed pivot periods, policy matters most. During economic slowdowns, employment and GDP become more critical.
How accurate is the macro regime?
Historical analysis shows strong correlation between macro regime and subsequent 30-90 day market performance. However, markets can diverge from fundamentals in the short term. Use macro regime for directional bias, not precise timing.
What causes macro regime changes?
Major economic data releases, Fed policy shifts, inflation surprises, employment shocks, and significant changes in market stress conditions can trigger regime changes. Changes are gradual as multiple data points shift the composite score.
Should I ignore short-term moves in macro risk-off?
Not necessarily. Even in macro risk-off, there are tradeable rallies. However, maintain defensive positioning and use bounces to reduce risk rather than add. The risk regime can help time entries/exits within the macro trend.
Pro Tips
Combine macro regime with risk regime - trade with risk regime timing but bias towards macro regime direction
Pay attention to component trends - deteriorating trends often precede regime changes
Read the AI analysis daily for nuanced understanding beyond just the score
Track bullish vs bearish driver balance for early warning signals
Use longer time frames (90+ days) to understand where current conditions fit historically
Major Fed meetings and NFP releases are key catalysts for regime shifts
Macro risk-off can persist for months - don't fight the trend
Component divergences (e.g., strong employment but high inflation) create uncertainty
Screenshot and save significant AI analyses for future reference
Use macro regime for position sizing - smaller in neutral/risk-off, larger in risk-on
TABLE OF CONTENTS
Next: Risk Regime Guide
Learn how to use the hourly Risk Regime for short-term trading decisions and intraday risk management
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