Blue dashed — Gate (63d) Above 0% = CPI still elevated → Q4 blocked. Below 0% = gate clear.
Regime = where the two solid lines sit vs zero. Both above → Q2. Green above, amber below → Q1. Both below (gate clear) → Q4. Green below, amber above → Q3.
15-Year Accuracy by Quadrant · Jan 2010–Apr 2026 · 3-day confirmation · Q4 inflation gate · Hybrid DBC/DBA proxy
Configuration Comparison · Hit Rate vs False Signal Rate
Methodology
68 ETFs · Jan 2010–Apr 2026 · 4,082 trading days (~16 years) · 263 confirmed regime changes · 3-day confirmation filter (13–20% false signal rate vs 38% in 5yr test) · Hybrid inflation proxy: DBC→DBA when energy premium >6pp (geopolitical filter) · Q4 gate: requires 63d commodity momentum negative · Captures: taper tantrum, COVID, rate-hike cycle, QE era · Q4 hit rate 50% over 15yr (bonds worked pre-2021)
A regime change is flagged when today's quadrant differs from yesterday's. No action yet.
B
Confirmed only if the same quadrant holds on day+1 and day+2. Eliminates 42% of false signals.
C
Unconfirmed flags are ignored — the previous regime remains active. ~16 confirmed changes/year.
④ Q4 Inflation Gate
A
If Q4 fires but 63d DBC+GLD momentum is still positive, inflation hasn't rolled over — false signal.
B
Action: skip — hold the previous regime. 63% of historical Q4 signals filtered this way.
C
When gate clears: act with XLU · XLP · XLV · IEF · IEI · SHY. Hit rate rises to 50%.
⑤ Style Factor Framework — What Works in Each Quadrant
Q1 — Goldilocks
Long: US Large Growth · High Momentum · Small Cap Short: Energy · Intl/EM Equities Bonds: Avoid duration Crypto: IBIT opportunistic (satellite, high risk) FX: USD neutral
Q2 — Overheating
Long: Commodities · Energy · Cyclicals Short: Long Bonds · High Yield · EUR/JPY Bonds: Short duration only Crypto: Neutral — avoid FX: USD strong, avoid EUR/JPY
Q3 — Stagflation
Long: Gold · Silver · Oil · Energy Short: Long Bonds · EM Bonds · JPY Bonds: Short duration only (SHY) Crypto: IBIT opportunistic (satellite) FX: USD strong, avoid JPY
Q4 — Deflation
Long: Defensives · Low Vol · Med Bonds Short: Oil · Commodities · Frontier EM Bonds: Med duration (IEF/IEI), avoid TLT Crypto: Not recommended Gate: Only fires when 63d infl gate is clear
⑥ Live Updates — How Data Is Fetched
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Data source — Yahoo Finance free API. Routed via own Nginx /yf/ proxy — no third-party dependency, no rate limits.
Schedule — Auto-checks at 5pm CT weekdays. Countdown shown in top bar. Hit ↻ Refresh at any time.
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Alerts — ~16 confirmed changes/year. Subscribe via the alert box on Live Regime tab.
Note on UUP: Tested and excluded from all baskets — worst performer in Q4 in both high and low CPI environments (−0.46% and −1.35% respectively). The dollar strengthens during rate-hike cycles when Q4 shouldn't be active.
Step 1 — Check the Current Regime
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The large coloured card on the Live Regime tab shows which of the four quadrants is active and how long it has been running.
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Goldilocks = growth up, inflation down. Overheating = both up. Stagflation = growth down, inflation up. Deflation = both down.
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Check the Hit Rate and Avg Fwd 20d shown on the card — these are the 15-year backtest results for this regime.
Step 2 — Confirm the Signal
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Only act when the 3-Day Confirmation pill reads CONFIRMED. A new regime needs 3 consecutive days before it is official.
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Check the three gauges — Growth (green), Inflation (amber), Gate (blue). Bars right of centre = positive signal.
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If Q4 Filter Active shows BLOCKING, the deflation signal has been suppressed — hold the previous regime.
Step 3 — Review the ETF Baskets
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Long tiles — The recommended ETF basket for this regime. 20-day return shows recent momentum. 5-day return shows short-term direction.
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Short tiles — ETFs that historically underperform in this regime. Consider reducing or avoiding these.
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Crypto note — IBIT is opportunistic in Q1 and Q3 only. High risk, satellite position only — not core.
Step 4 — Monitor & Stay Alerted
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History tab — Review the SPY chart with colour-coded regime bands to see how the current regime compares to past episodes.
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Signal chart — Watch for growth and inflation lines crossing zero — that is typically where regime changes begin.
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Subscribe to alerts — Enter your email on the Live Regime tab. You will be notified within 24 hours of any confirmed regime change (~16/year).
Common Questions
Why didn’t the regime change even though the Gate went negative?
The Gate going negative does not trigger a regime change on its own. It is a permission switch, not a signal. It only matters for Q4 — and only if both Growth and Inflation are already negative. If Growth is still positive, the regime stays Q1 or Q2 regardless of the Gate. Think of it as: the Gate going negative unlocks the door to Q4, but Growth and Inflation still have to knock.
The Gate has been negative for several days but nothing changed — is that normal?
Yes, completely normal. Check the Growth Signal on the Live Regime tab. If Growth is positive (green), the model is in Q1 or Q2 — the Gate is irrelevant in those quadrants. The Gate only blocks or allows Q4. It has no effect on Q1, Q2, or Q3 signals at all.
Why does the 3-Day Confirmation exist?
Without it, the model generated a false signal on 38% of regime changes in backtesting — flags that reversed within a day or two. Requiring 3 consecutive days in the same quadrant cuts that to 13–20%. The cost is a 2–3 day lag on entry. The benefit is far fewer whipsaws.
What does the Inflation Signal going negative mean if we’re still in Q2?
It means 20-day commodity momentum has dipped below zero, but the 3-day confirmation has not yet confirmed a change. The model holds Q2 until the new quadrant holds for 3 full days. If the amber line stays below zero on the signal chart, a confirmed shift to Q1 is likely within days.
Quick Reference — What Each Regime Means for Your Portfolio
Q1 Goldilocks
Favour: US tech, growth stocks, small caps Reduce: Energy, international, bonds Hit rate: 62% · Avg fwd 20d: +1.03% Typical duration: Weeks to months
Q2 Overheating
Favour: Commodities, energy, cyclicals Reduce: Long bonds, high yield, EUR/JPY Hit rate: 55% · Avg fwd 20d: +1.46% Typical duration: Weeks to months
Q3 Stagflation
Favour: Gold, silver, oil, short bonds Reduce: Long bonds, EM bonds, JPY Hit rate: 51% · Avg fwd 20d: +0.36% Typical duration: Days to weeks
Q4 Deflation
Favour: Defensives, utilities, med bonds Reduce: Oil, commodities, frontier EM Hit rate: 50% · Avg fwd 20d: +0.43% Gate required: 63d infl momentum negative
Remember: This is a signal framework, not a trading system. Hit rates of 50–62% mean there will be false signals. Always size positions accordingly and consult a qualified financial advisor before acting.
⚠️ DISCLAIMER — NOT INVESTMENT ADVICE
This dashboard is provided for informational and educational purposes only and does not constitute investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services. Past regime accuracy does not guarantee future results. All backtested results are hypothetical and do not reflect actual trading or the impact of transaction costs, taxes, or fees. You must conduct your own research and consult a qualified financial advisor before making any investment decisions. The authors accept no liability for investment decisions made using this tool.