OPEN-SOURCE SCRIPT
Sector Alert Signals
This Pine Script v6 indicator is a Macro Regime & Sector Rotation Engine. It synthesizes inter-market relationships across 17+ tickers to detect structural shifts in the US equity market that are often invisible on a single-asset chart.
📊 Executive Summary
It utilizes Z-score normalization, volatility-adjusted performance, and ratio analysis to identify 9 distinct macro scenarios. By monitoring the flow of "Smart Money" between defensive and cyclical sectors, the script provides real-time alerts on regime transitions, liquidity cycles, and credit stress.
🛠 Core Macro Scenarios
The engine monitors the following regimes:
1. Risk-On / Risk-Off (XLY/XLP)
Macro Divergence: Identifies when Consumer Discretionary (XLY) leads Staples (XLP) while SPY remains hesitant—a classic "early cycle" recovery signal.
Bubble Alert: Detects extreme greed when SPY is overbought and the XLY/XLP ratio hits a +2.0 Z-score.
2. Monetary Policy & Rate Sensitivity (XLK/XLF)
Rate Cut Front-run: Detects aggressive tech bidding paired with financial weakness, signaling market anticipation of easing.
Growth-to-Value Rotation: Confirms structural shifts when Tech retreats while Financials and Energy surge.
3. Inflation & Reflation Logic
Reflation Trade: Flags "Bond Proxies" (Utilities/Real Estate) plunging while "Hard Assets" (Energy/Metals) surge.
4. Systemic Risk & Credit Stress
KRE Liquidity Collapse: Monitors the spread between Regional Banks (KRE) and Diversified Financials (XLF). A widening negative spread during price drops signals structural credit tightening.
Small Cap Stress: Tracks IWM/SPY divergence as a canary in the coal mine for liquidity withdrawal.
5. Volatility & Liquidity Regimes
High-Vol Leaders: Identifies sectors showing "True Strength" (Performance / Volatility) even when the VIX is > 20.
Liquidity Party: Detects synchronized "High Beta" explosions (SOXX, IGV, XBI, CLOU) indicative of FOMO-driven liquidity peaks.
6. Market Breadth (RSP/SPY)
Concentration Risk: Uses the Equal-Weight vs. Cap-Weight Z-score to alert when the market is narrowing (dangerous) or broadening (healthy).
📊 Executive Summary
It utilizes Z-score normalization, volatility-adjusted performance, and ratio analysis to identify 9 distinct macro scenarios. By monitoring the flow of "Smart Money" between defensive and cyclical sectors, the script provides real-time alerts on regime transitions, liquidity cycles, and credit stress.
🛠 Core Macro Scenarios
The engine monitors the following regimes:
1. Risk-On / Risk-Off (XLY/XLP)
Macro Divergence: Identifies when Consumer Discretionary (XLY) leads Staples (XLP) while SPY remains hesitant—a classic "early cycle" recovery signal.
Bubble Alert: Detects extreme greed when SPY is overbought and the XLY/XLP ratio hits a +2.0 Z-score.
2. Monetary Policy & Rate Sensitivity (XLK/XLF)
Rate Cut Front-run: Detects aggressive tech bidding paired with financial weakness, signaling market anticipation of easing.
Growth-to-Value Rotation: Confirms structural shifts when Tech retreats while Financials and Energy surge.
3. Inflation & Reflation Logic
Reflation Trade: Flags "Bond Proxies" (Utilities/Real Estate) plunging while "Hard Assets" (Energy/Metals) surge.
4. Systemic Risk & Credit Stress
KRE Liquidity Collapse: Monitors the spread between Regional Banks (KRE) and Diversified Financials (XLF). A widening negative spread during price drops signals structural credit tightening.
Small Cap Stress: Tracks IWM/SPY divergence as a canary in the coal mine for liquidity withdrawal.
5. Volatility & Liquidity Regimes
High-Vol Leaders: Identifies sectors showing "True Strength" (Performance / Volatility) even when the VIX is > 20.
Liquidity Party: Detects synchronized "High Beta" explosions (SOXX, IGV, XBI, CLOU) indicative of FOMO-driven liquidity peaks.
6. Market Breadth (RSP/SPY)
Concentration Risk: Uses the Equal-Weight vs. Cap-Weight Z-score to alert when the market is narrowing (dangerous) or broadening (healthy).
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.