PCA Regime & Conviction Index

This indicator diagnoses the underlying character and conviction of the market's current behavior, going far beyond simple price direction.

Instead of just asking "Is the market going up or down?", this tool answers the more critical question: "How is the market moving right now?"

To do this, it provides two key pieces of information:

1. It Identifies the Current Market Phase.

The indicator classifies the market's behavior into one of four distinct phases, which are displayed as a clear background color and an explicit text label:

Quiet Bull: A steady, healthy, low-volatility uptrend.
Volatile Bull: An explosive, energetic, or potentially exhaustive uptrend.
Quiet Bear: A slow, grinding, low-volatility downtrend or "bleed."
Volatile Bear: A sharp, high-energy, or panic-driven downtrend.
This tells you the fundamental personality of the market at a glance.

2. It Measures the Conviction of That Phase.

Alongside identifying the phase, the indicator plots a "Conviction Index"—a clear gold line oscillating between 0 and 100. This index measures the strength and clarity of the current market phase.

A high conviction level (e.g., above 75) means the current phase is strong, stable, and decisive.
A low conviction level (e.g., below 25) means the phase is weak, uncertain, and lacks energy.
The Ultimate Benefit:

By understanding both what the market is doing (the phase) and how strongly it's doing it (the conviction), a trader can make more intelligent decisions. It helps you adapt your strategy in real-time by providing a clear framework to:

Confidently pursue trends when the market is in a high-conviction "Quiet Bull" or "Quiet Bear" phase.
Exercise caution and manage risk during high-conviction "Volatile" phases.
Avoid whipsaws and frustration by recognizing when the market has low conviction and is likely to be choppy and unpredictable, regardless of the phase.