Founder’s Note: Grant Hawkridge is always looking for new ways to get to the truth.
Data is the mission for Grant. And we’re better for his command of that mission.
Here he is with an update on his work setup and the market environment. – JC
By Grant Hawkridge
G’day, Grant here again.
I recently upgraded my computer. Not because I wanted something new, but because the old one could not keep up with the work I am doing now.
Too many charts open. Too many datasets running at once. Too much number crunching happening at the same time.
The computer lagged, froze, and slowed me down at the exact moments decisions needed to be made.
When your tools fall behind, the process breaks down. You miss things. Decisions get rushed. You start working around limitations instead of doing the work properly.
Markets work the same way.
Using the wrong indicators in the wrong environment puts you on the wrong playbook. The signals stop matching how the market is behaving.
It’s not about adding more tools. It’s about using the ones that actually work.
What works in a strong, trending market does not work the same way in a choppy or defensive one.
Trend tools perform when participation is broad, and momentum is present.
Mean reversion tools work when markets compress, and leadership fades. Mixing those lenses leads to bad reads.
Right now, the trading environment is doing the talking.
The indicators worth paying attention to are the ones that track risk appetite.
Intermarket Risk Radar Composite
The Intermarket Risk Radar Composite pulls together 10 cross-asset ratios that capture how investors are actually positioning.
It combines equities, credit, commodities, currencies, and factors, using price behavior rather than narratives to define risk-on and risk-off regimes.
Each ratio is evaluated across short-, medium-, and long-term trends then rolled into a single composite score between 0.00 and 1.00.
Higher readings reflect risk appetite. Lower readings reflect defense.
Right now, the composite remains above 0.50, which keeps the market in a risk-on regime.
What stands out is how long it has stayed there. Through most of the second half of the year, risk appetite has stayed positive even as the market worked through pullbacks and pauses.
The reading cooled at times, but it never shifted into the risk-off zone.
When markets are under pressure, pullbacks usually come with a rush toward defense. That hasn’t happened here.
Periods of weakness have been used to reset positioning, with buyers stepping back in before defensive leadership can take hold.
Risk appetite has cooled at times, but it hasn’t flipped. Participation remains present beneath the surface, which is why trends have continued to carry through.
That is the message coming through the Intermarket Risk Radar Composite.
High Beta Is Still Leading Low Volatility
If one relationship inside the composite captures the tone of this market, it is High Beta vs Low Volatility:
This ratio reflects behavior in its simplest form. When investors want upside, High Beta leads. When they want protection, Low Volatility takes over.
Right now, High Beta remains in control.
This ratio continues to trade above its key trend measures, with pullbacks staying contained and shallow. Leadership favors offense, not safety.
That pattern has shown up repeatedly through most of the second half of the year, matching what the broader composite has been signaling.
Markets rarely top while this relationship behaves this way.
When High Beta leadership persists, participation tends to stay broad, and pullbacks tend to resolve higher.
What This Environment Favors
This is an environment that rewards staying with the trend.
Breakouts have a better chance of sticking. Pullbacks tend to act as resets. Defensive rotations struggle to gain traction while risk appetite stays high.
The Intermarket Risk Radar Composite is built to read that backdrop – not to predict mainstream media headlines, but to stay on the right side of the regime while it’s still paying.
As long as risk appetite remains at these levels and leadership stays with offensive names, the bullish case remains intact.
In the meantime, the charts will continue to update.
The data will show when these conditions change.
Until that changes, the path still favors higher prices.
Happy hitting🏌️⛳,
Grant Hawkridge
Quantitative Analyst, TrendLabs