AITOUZI / MARKET HEAT
Reading market heat: risk appetite is not a trade signal
Market heat brings together trends, volatility and sentiment to describe the market environment. It does not value an individual stock or predict tomorrow's direction. Check dates, coverage and agreement between indicators before interpreting a score.
Read the components first
The tool combines index distance from moving averages, momentum, VIX, option ratios and surveys. VIX measures expected volatility, not a direction. The proportion of positive index days is not the proportion of advancing stocks; these measures are not interchangeable.
Example: a rising index can still carry risk
If a few large stocks drive an index while credit or volatility deteriorates, a composite can hide disagreement. Check sector participation, then strategy conditions; do not convert heat directly into a position size. This is an illustrative scenario, not a live market call.
Reading checklist
| What to check | How to interpret it |
|---|---|
| Dates | Read daily, weekly and monthly cutoffs separately. |
| Coverage | Missing values are not zero and do not imply no risk. |
| Disagreement | Keep both pieces of evidence when trend and sentiment diverge. |
Limits & counterexamples
Historical percentiles depend on the sample window. Correlated indicators are not independent confirmations. Missing data, revisions and delays can change readings.
Sources & verification
For research and education only, not a securities recommendation or personalized investment advice. Historical results do not predict future performance.