A Quick Look at Some of the Free Tools on the Site

Wanted to take a few minutes to walk through some of the tools on the site that do not always get enough attention. A few of them have been particularly relevant lately and worth knowing about if you are following the markets day to day.

The trading forecast page at TradingTimeMachine.com is updated every evening. The gauge scans decades of SPY history, finds days that look like today, and measures whether expected returns are running above or below the historical average for those conditions. Three zones. Green means conditions have historically produced above average returns. Yellow means close to average, no strong edge either way. Red means conditions have historically leaned bearish. Timeframes run from 1 day out to 10 days. When multiple timeframes are in agreement the signal carries more weight. When they are mixed that is worth paying attention to as well.

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Market Forecast gauge

Yellow is actually the most common state. The gauge spends a lot of time there. Green and red are the rarer conditions and when they show up across multiple timeframes that is when the gauge becomes most actionable. During the recent run it has been sitting mostly in yellow. Normal returns. No strong edge. A lot of other sites were screaming overbought through this whole move. This one stayed neutral because the data did not support a strong call in either direction. Sometimes that is exactly the right read.

Below the pattern forecast is the volatility structure gauge. This one reads the VIX term structure. Specifically the relationship between VIX9D, VIX, and VIX3M. When near term fear is lower than longer dated fear the curve is in contango. Normal healthy market structure. When near term fear spikes above longer dated fear the curve inverts. That is a stress signal. Most tools stop there and just read the shape of the curve. This one goes further. It tested every combination of term structure shape, VIX level, and spread direction against actual forward SPY returns across more than 121,000 ten minute bars going back to 2013. The result is a regime classification tied to real historical outcomes not just a textbook rule. Strong bull at elevated VIX historically produces the best forward return setups. Full inversion at elevated VIX in the 25 to 30 range is historically the most negative regime in the dataset. And one interesting nuance. At extreme panic levels above VIX 30 a fully inverted structure actually flips to a contrarian bullish signal. Fear at its peak has historically been a mean reversion catalyst. The gauge accounts for that automatically.

Volatility Term Structure Backtest Viewer

The forward return window this tool is looking at is 1 to 2.5 trading days. Short term lean not a long term call. Worth noting it is still experimental and can be a little clunky with updates. It will be refined over time. Data runs on a 15 minute delay so best used during regular trading hours when VIX9D and VIX3M are getting updated quotes.

If you follow the markets during the day bookmark the Traders Tools page. Two audio sources running together. TickStrike for price tick audio on SP500, EUR/USD, Oil, and Bitcoin. FinancialJuice voice squawk for live news. Live economic calendar and a text news feed rounding it out. No ads. No noise. Just what you need.

Voice Squawk and Live news with Economic Calendar

One thing worth doing when you first set it up. Make sure both audio sources are set to persistent in your browser. Otherwise the sound fades when you switch tabs and you miss alerts.

All of these tools are free and live at tradingtimemachine.com. No login required for the forecast page or the trader tools dashboard. A lot of people find the Substack first and never make it to the site. Worth the visit.

Have a Great Night!

Dave Johnson

Quant Developer

TradingTimeMachine.com

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