S&P 500 energy gauge as a short-horizon regime filter

Check the cross-market setting first

The archive put a single S&P 500 long inside a wider market context. Intermarket analysis came before any energy reading. Material S&P 500 advances were described as typically coinciding with weaker bonds and a preference for higher-beta currencies such as the Australian dollar over the Japanese yen.

Correlation analysis was the check that equity, rate, and currency markets were moving together. Fear and the bond factor were presented as uncorrelated, with the bond factor described as more volatile than the fear factor.

What the energy index combined

The energy index was a composite 0 to 100 reading of near-term rally potential in the S&P 500. It was constructed from three short-horizon inputs: fear, time since the last weakness episode, and interest rates.

Those inputs are the fear factor, time since weakness, and the rate factor. Time since weakness is the elapsed time since the last material drawdown. It marks the trauma window, the interval after a forced-selling episode when sidelined buyers have not yet returned. The rate factor is the interest-rate component used to assess equity valuation support.

The energy index had a reported mean of 52 and a median of 50.

A short holding window only

A high energy-index reading that persisted was treated as support for holding a long equity position for about one to 10 days, not for a monthly horizon.

The same conditions in a currency pair

An Australian-dollar versus euro cross was used as a case of translating S&P 500 conditions into a currency pair after adjusting for the broad US-dollar direction. That step is Currency translation of the same intermarket setting.