RISK ROTATION MATRIX ║ BullVision [3.0]

🔍 Overview

The Risk Rotation Matrix is a comprehensive market regime detection system that analyzes global market conditions across four critical domains: Liquidity, Macroeconomic, Crypto/Commodities, and Risk/Volatility. Through proprietary algorithms and advanced statistical analysis, it transforms 20+ diverse market metrics into a unified framework for identifying regime transitions and risk rotations.

This institutional-grade system aims to solve a fundamental challenge: how to synthesize complex, multi-domain market data into clear, actionable trading intelligence. By combining proprietary liquidity calculations with sophisticated cross-asset analysis.

The Four-Domain Architecture

1. 💧 LIQUIDITY DOMAIN
Our liquidity analysis combines standard metrics with proprietary calculations:

Proprietary Components:

• Custom Global Liquidity Index (GLI): Unique formula aggregating central bank assets, credit spreads, and FX dynamics through our weighted algorithm
  
• Federal Reserve Balance Proxy: Advanced calculation incorporating reverse repos, TGA fluctuations, and QE/QT impacts
  
• China Liquidity Proxy: First-of-its-kind metric combining PBOC operations with FX-adjusted aggregates
  
• Global M2 Composite: Custom multi-currency M2 aggregation with proprietary FX normalization
  

2. 📈 MACRO DOMAIN
Sophisticated integration of global economic indicators:

• S&P 500: Momentum and trend analysis with custom z-score normalization
  
• China Blue Chips: Asian market sentiment with correlation filtering
  
• MBA Purchase Index: Real estate market health indicator
  
• Emerging Markets (EEMS): Risk appetite measurement
  
• Global ETF (URTH): Worldwide equity exposure tracking
  

Each metric undergoes proprietary transformation to ensure comparability and regime-specific sensitivity.

3. 🪙 CRYPTO/COMMODITIES DOMAIN
Unique cross-asset analysis combining:

• Total Crypto Market Cap: Liquidity flow indicator with custom smoothing
  
• Bitcoin SOPR: On-chain profitability analysis with adaptive periods
  
• MVRV Z-Score: Advanced implementation with multiple MA options
  
• BTC/Silver Ratio: Novel commodity-crypto relationship metric
  

Our algorithms detect when crypto markets lead or lag traditional assets, providing crucial timing signals.

4. ⚡ RISK/VOLATILITY DOMAIN
Advanced volatility regime detection through:

• MOVE Index: Bond volatility with inverse correlation analysis
  
• VVIX/VIX Ratio: Volatility-of-volatility for regime extremes
  
• SKEW Index: Tail risk measurement with custom normalization
  
• Credit Stress Composite: Proprietary combination of credit spreads
  
• USDT Dominance: Crypto flight-to-safety indicator
  

All risk metrics are inverted and normalized to align with the unified scoring system.



🧠 Advanced Integration Methodology

Multi-Stage Processing Pipeline

1. Data Collection: Real-time aggregation from 20+ sources
   
2. Normalization: Custom z-score variants accounting for regime-specific volatility
   
3. Domain Scoring: Proprietary weighting within each domain
   
4. Cross-Domain Synthesis: Advanced correlation matrix between domains
   
5. Regime Detection: State-transition model identifying four market phases
   
6. Signal Generation: Composite score with adaptive smoothing
   

🔁 Composite Smoothing & Signal Generation
The user can apply smoothing (ALMA, EMA, etc.) to highlight trends and reduce noise. Smoothing length, type, and parameters are fully customizable for different trading styles.



🎯 Color Feedback & Market Regimes
Visual dynamics (color gradients, labels, trails, and quadrant placement) offer an at-a-glance interpretation of the market’s evolving risk environment—without forecasting or forward-looking assumptions.



🎯 The Quadrant Visualization System

Our innovative visual framework transforms complex calculations into intuitive intelligence:

• Dynamic Ehlers Loop: Shows current position and momentum
  
• Trailing History: Visual path of regime transitions
  
• Real-Time Animation: Immediate feedback on condition changes
  
• Multi-Layer Information: Depth through color, size, and positioning
  

🚀 Practical Applications

Primary Use Cases

• Multi-Asset Portfolio Management: Optimize allocation across asset classes based on regime
  
• Risk Budgeting: Adjust exposure dynamically with regime changes
  
• Tactical Trading: Time entries/exits using regime transitions
  
• Hedging Strategies: Implement protection before risk-off phases
  

Specific Trading Scenarios

• Domain Divergence: When liquidity improves but risk metrics deteriorate
  
• Early Rotation Detection: Crypto/commodity signals often lead broader markets
  
• Volatility Regime Trades: Position for mean reversion or trend following
  
• Cross-Asset Arbitrage: Exploit temporary dislocations between domains
  

⚙️ How It Works

The Composite Score Engine
The system's intelligence emerges from how it combines domains:

• Each domain produces a normalized score (-2 to +2 range)
  
• Proprietary algorithms weight domains based on market conditions
  
• Composite score indicates overall market regime
  
• Smoothing options (ALMA, EMA, etc.) optimize for different timeframes
  

Regime Classification

• 🟢 Risk-On (Green): Positive composite + positive momentum
  
• 🟠 Weakening (Orange): Positive composite + negative momentum
  
• 🔵 Recovery (Blue): Negative composite + positive momentum
  
• 🔴 Risk-Off (Red): Negative composite + negative momentum
  

Signal Interpretation Framework
The indicator provides three levels of analysis:

• Composite Score: Overall market regime (-2 to +2)
  
• Domain Scores: Identify which factors drive regime
  
• Individual Metrics: Granular analysis of specific components
  

🎨 Features & Functionality

Core Components

• Risk Rotation Quadrant: Primary visual interface with Ehlers loop
  
• Data Matrix Dashboard: Real-time display of all 20+ metrics
  
• Domain Aggregation: Separate scores for each domain
  
• Composite Calculation: Unified score with multiple smoothing options
  

Customization Options

• Selective Metrics: Enable/disable individual components
  
• Period Adjustment: Optimize lookback for each metric
  
• Smoothing Selection: 10 different MA types including ALMA
  
• Visual Configuration: Quadrant scale, colors, trails, effects
  

Advanced Settings

• Pre-smoothing: Reduce noise before final calculation
  
• Adaptive Periods: Automatic adjustment during volatility
  
• Correlation Filters: Remove redundant signals
  
• Regime Memory: Hysteresis to prevent whipsaws
  

📋 Implementation Guide

Setup Process

• Add to chart (optimized for daily, works on all timeframes)
  
• Review default settings for your market focus
  
• Adjust domain weights based on trading style
  
• Configure visual preferences
  

Optimization by Trading Style

• Position Trading: Longer periods (60-150), heavy smoothing
  
• Swing Trading: Medium periods (20-60), balanced smoothing
  
• Active Trading: Shorter periods (10-40), minimal smoothing
  

Best Practices

• Monitor domain divergences for early signals
  
• Use extreme readings (-1.5/+1.5) for high-conviction trades
  
• Combine with price action for confirmation
  
• Adjust parameters during major events (FOMC, earnings)
  

💎 What Makes This Unique
Beyond Traditional Indicators

• Multi-Domain Integration: Only system combining liquidity, macro, crypto, and volatility
  
• Proprietary Calculations: Custom formulas for GLI, Fed, China, and M2 proxies
  
• Adaptive Architecture: Dynamically adjusts to market regimes
  
• Institutional Depth: 20+ integrated metrics vs typical 3-5
  

Technical Innovation

• Statistical Normalization: Custom z-score variants for cross-asset comparison
  
• Correlation Management: Prevents double-counting related signals
  
• Regime Persistence: Algorithms to identify sustainable vs temporary shifts
  
• Visual Intelligence: Information-dense display without overwhelming
  

🔢 Performance Characteristics

Strengths

• Early regime detection (typically 1-3 weeks ahead)
  
• Robust across different market environments
  
• Clear visual feedback reduces interpretation errors
  
• Comprehensive coverage prevents blind spots
  

Optimal Conditions

• Most effective with 100+ bars of history
  
• Best on daily timeframe (4H minimum recommended)
  
• Requires liquid markets for accurate signals
  
• Performance improves with more enabled components
  

⚠️ Risk Considerations & Limitations

Important Disclaimers

• Probabilistic system, not predictive
  
• Requires understanding of macro relationships
  
• Signals should complement other analysis
  
• Past regime behavior doesn't guarantee future patterns
  

Known Limitations

• Black swan events may cause temporary distortions
  
• Central bank interventions can override signals
  
• Requires active management during regime transitions
  
• Not suitable for pure technical traders
  

💎 Conclusion

The Risk Rotation Matrix represents a new paradigm in market regime analysis. By combining proprietary liquidity calculations with comprehensive multi-domain monitoring, it provides institutional-grade intelligence previously available only to large funds. The system's strength lies not just in its individual components, but in how it synthesizes diverse market information into clear, actionable trading signals.

⚠️ Access & Intellectual Property Notice

This invite-only indicator contains proprietary algorithms, custom calculations, and years of quantitative research. The mathematical formulations for our liquidity proxies, cross-domain correlation matrices, and regime detection algorithms represent significant intellectual property. Access is restricted to protect these innovations and maintain their effectiveness for serious traders who understand the value of comprehensive market regime analysis.