Market Topping Regime Score

7-Signal Composite with Fiscal Dominance Modifier · Monthly · Jan 1980 – Mar 2026

Adjusted Score (with FD modifier)
Raw Score
S&P 500 (log, right axis)
Fiscal Dominance Active
Extreme Zone (80+)
High Zone (60-80)

Fiscal Dominance Flag

When active (purple shading), the flag adds +10 to the composite score and reweights signals. Activates when 3 of 4 conditions are met: deficit >5% GDP (non-recession), interest/revenue >15%, Fed easing while inflation >target, curve steepening with rising term premium. The flag was briefly active during 2009-2010 (post-crisis deficits) and became persistently active from late 2024 as structural fiscal dominance emerged.

Signal 1: Breadth Divergence & Concentration Risk

Signal 2: Valuation (CAPE)

Signal 3: Credit Complacency (HY Spreads)

Signal 4: Sentiment (VIX)

Signal 5: Macro Deterioration (ISM)

Signal 6: Margin Debt / Leverage

Signal 7: Term Premium / Fiscal Stress

Fiscal Dominance: Conditions Met (of 4)