Market Resilience Index (MRI) Series
The MRI indicators are derived solely from index price changes. They measure the acceleration of price momentum. They indicate trends lasting several weeks to multiple quarters. These indicators help identify sentiment inflection points, highlighting short- and long-term opportunities to enter or exit the market.
- Micro MRI (solid green): Captures shorter-term price trends lasting several weeks. Conceptually, it reflects the acceleration of measures such as the 14-week RSI. Acceleration is an important metric because it best captures shifts in investor emotion and, mathematically, cannot remain elevated or depressed for extended periods, unlike momentum itself. This makes price momentum acceleration strongly mean-reverting. A trough at a low level suggests a strong short-term buying opportunity, while a peak at a high level indicates a strong short-term selling opportunity. Levels are normalized to range from 0 to 100, with the current score and slope (positive or negative) shown in the legend.
- Macro MRI (solid light blue line): Reflects long-term acceleration trends lasting several quarters. Levels are normalized to range from 0 to 100, with the current score and slope (positive or negative) shown in the legend.
- Exceptional Macro MRI (solid light blue spikes): Appears when the slope of the Macro MRI is likely to turn more positive, signaling rising market resilience. When present, it can offset pessimism associated with a declining Macro or Micro MRI. Its disappearance often precedes short-term market price weakness.
In general, the market tends to recover quickly and move higher when at least two of the three MRI indicate positive trends in acceleration, or "resilience."
