Market Demon

How It Works

A simple guide to how the dashboard reads macro data, scores the evidence, identifies the regime, and turns it into market expectations.

Introduction

Market Demon is a macro regime dashboard.

It helps users understand the market environment using economic activity, inflation, policy, liquidity, credit stress, and risk sentiment data. The goal is to make the macro backdrop easier to read before looking for trades.

Data Flow

From Macro Data To Market View

FRED / Macro DataOfficial data and market series
Indicator CalculationLatest value and change
Score-1 / 0 / +1 direction
Category ScoreGrowth, inflation, policy, credit, risk
Market RegimeExpansion, slowdown, recovery, mixed
PlaybookExpectations and risk notes

Growth / Economic Activity

Measures whether the economy is expanding, slowing, or weakening using activity, demand, and labour indicators.

Inflation / Price Pressure

Measures whether inflation pressure is rising, falling, or stable. Hot inflation can be negative if it keeps the Fed restrictive.

Policy / Liquidity

Measures whether central bank policy, real yields, and system liquidity are supportive or restrictive.

Credit / Stress

Measures whether the financial system is calm or showing signs of stress through spreads and liquidity pressure.

Market Risk Appetite

Measures whether investors are behaving risk-on or risk-off using equity trend, volatility, USD, yields, and related market data.

Scoring System

+1 means supportive, rising, or risk-on depending on the indicator. 0 means neutral or unclear. -1 means weakening, restrictive, or risk-off. Not every +1 is bullish.

Regime Logic

How The Cycle Is Selected

The app compares growth, inflation, policy/liquidity, credit stress, and market risk appetite. When most categories align, the regime becomes clearer. When signals conflict, the app classifies the environment as Mixed / Transition.

Expansion Late Cycle Slowdown Recession Risk Recovery Mixed / Transition

Confidence Score

Confidence depends on signal alignment. High confidence means most categories point the same way. Medium confidence means some agree. Low confidence means signals are mixed.

Why Confidence Matters

Low confidence means users should reduce conviction, wait for confirmation, or use smaller risk. It is a practical warning against overconfidence.

Timing

Leading vs Lagging Data

LeadingPMI, yield curve, credit spreads, market risk appetite
CoincidentPayrolls, retail sales, industrial production
LaggingGDP, unemployment rate, some inflation data

Macro data can be delayed or revised, so the dashboard should be used as context, not certainty.

Execution

Macro Bias Is Not Trade Entry

Macro Bias: BullishPrice Confirmation: Not confirmedAction: Wait
Macro Bias: BullishPrice Confirmation: ConfirmedAction: Look for valid setup

Workflow

How To Use The App

  1. Sync latest macro data.
  2. Read the current regime.
  3. Check confidence score.
  4. Review key drivers.
  5. Check the asset-specific playbook.
  6. Confirm with price action and risk management.

What The App Does Not Do

It does not predict exact tops or bottoms, give guaranteed buy/sell signals, replace discipline, replace risk management, or guarantee profitability.

Example Interpretation

Regime: Mixed / Transition

Growth: resilient | Inflation: sticky | Policy: restrictive | Risk appetite: mixed

The market is not clearly risk-on or risk-off. Avoid overconfidence and wait for stronger confirmation.