OPEN-SOURCE SCRIPT
Crisis indicator
What This Indicator Does
This indicator acts as an early warning system for potential market crises by tracking 5 of the most reliable financial danger signals that have predicted major market declines throughout history.
The 5 Crisis Signals Monitored
1. Yield Curve Inversion
- What it measures: When short-term interest rates become higher than long-term rates
- Why it matters: This has predicted every US recession since 1955
- Trigger: Yield curve drops below your set threshold (default: 0.0)
2. Shiller CAPE Ratio
- What it measures: Stock market valuation adjusted for economic cycles
- Why it matters: Only exceeded 30 during major bubbles (1929, 2000, 2021) - all followed by crashes
- Trigger: CAPE ratio rises above your threshold (default: 30.0)
3. Buffett Indicator
- What it measures: Total stock market value compared to GDP
- Why it matters: Warren Buffett's favorite market valuation gauge
- Trigger: Ratio exceeds your threshold (default: 180%)
4. VIX Complacency
- What it measures: Market fear gauge (Volatility Index)
- Why it matters: Extremely low VIX indicates investor complacency before storms
- Trigger: VIX falls below your threshold (default: 15.0)
5. SPX Extreme Deviation
- What it measures: How far S&P 500 is above its 200-week moving average
- Why it matters: Major tops in 1929, 2000, 2021 all showed extreme deviations
- Trigger: Deviation exceeds your threshold (default: 2.8 standard deviations)
How to Read the Results
The Yellow Line (0-5 Scale)
- Shows how many of the 5 danger signals are currently active
- 0-1: Normal market conditions
- 2: High Risk - Caution advised
- 3+: Crisis Cluster - High probability of market decline
The Information Table
- Shows exactly which signals are triggering
- Displays current values for each indicator
- Color-coded status (Green = Safe, Red = Danger)
Historical Performance
When 3+ indicators flash simultaneously:
- 1999-2000: Preceded Dot-com crash (-49% SPX)
- 2007: Preceded Financial Crisis (-57% SPX)
- 2021: Preceded 2022 bear market (-25% SPX)
This indicator acts as an early warning system for potential market crises by tracking 5 of the most reliable financial danger signals that have predicted major market declines throughout history.
The 5 Crisis Signals Monitored
1. Yield Curve Inversion
- What it measures: When short-term interest rates become higher than long-term rates
- Why it matters: This has predicted every US recession since 1955
- Trigger: Yield curve drops below your set threshold (default: 0.0)
2. Shiller CAPE Ratio
- What it measures: Stock market valuation adjusted for economic cycles
- Why it matters: Only exceeded 30 during major bubbles (1929, 2000, 2021) - all followed by crashes
- Trigger: CAPE ratio rises above your threshold (default: 30.0)
3. Buffett Indicator
- What it measures: Total stock market value compared to GDP
- Why it matters: Warren Buffett's favorite market valuation gauge
- Trigger: Ratio exceeds your threshold (default: 180%)
4. VIX Complacency
- What it measures: Market fear gauge (Volatility Index)
- Why it matters: Extremely low VIX indicates investor complacency before storms
- Trigger: VIX falls below your threshold (default: 15.0)
5. SPX Extreme Deviation
- What it measures: How far S&P 500 is above its 200-week moving average
- Why it matters: Major tops in 1929, 2000, 2021 all showed extreme deviations
- Trigger: Deviation exceeds your threshold (default: 2.8 standard deviations)
How to Read the Results
The Yellow Line (0-5 Scale)
- Shows how many of the 5 danger signals are currently active
- 0-1: Normal market conditions
- 2: High Risk - Caution advised
- 3+: Crisis Cluster - High probability of market decline
The Information Table
- Shows exactly which signals are triggering
- Displays current values for each indicator
- Color-coded status (Green = Safe, Red = Danger)
Historical Performance
When 3+ indicators flash simultaneously:
- 1999-2000: Preceded Dot-com crash (-49% SPX)
- 2007: Preceded Financial Crisis (-57% SPX)
- 2021: Preceded 2022 bear market (-25% SPX)
Skrip sumber terbuka
Dalam semangat TradingView sebenar, pencipta skrip ini telah menjadikannya sumber terbuka, jadi pedagang boleh menilai dan mengesahkan kefungsiannya. Terima kasih kepada penulis! Walaupuan anda boleh menggunakan secara percuma, ingat bahawa penerbitan semula kod ini tertakluk kepada Peraturan Dalaman.
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.
Skrip sumber terbuka
Dalam semangat TradingView sebenar, pencipta skrip ini telah menjadikannya sumber terbuka, jadi pedagang boleh menilai dan mengesahkan kefungsiannya. Terima kasih kepada penulis! Walaupuan anda boleh menggunakan secara percuma, ingat bahawa penerbitan semula kod ini tertakluk kepada Peraturan Dalaman.
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.