The TOGGLE Leading Indicator

How to interpret TLI values

The TOGGLE leading indicator is designed to inform investors of the likely price-action in the S&P 500, based on historical performance.

If the TLI is above the bullish threshold (+0.15), historically the S&P increases in value over the following 12 days; conversely, if the TLI is below the bearish threshold (-0.15), the S&P decreases in value over the following 12 days.

However, this is not a linear process as the price of the SPX could fluctuate while leading up to the 12th day: nevertheless, since inception, the difference in price on the 12th day following a TLI alert has matched the TLI’s prediction on 86% of occasions.

When the TLI creates alerts on multiple consecutive days (meaning it stays past +/-0.15 for more than a day), the SPX’s price action has historically been reflected over the 12 days following each TLI point. In other words, you can expect market direction to stay its course from the 12th day of the first TLI alert up to the 12th day of the last one.

The absolute value of the TLI has also historically been correlated with the % in price movement of the SPX over the following 12 days. Essentially, the higher the TLI value, the greater the likelihood of a movement in the SPX, in either direction over the next 12 trading days.

The area between the values of -0.15 and +0.15 signify that there is not enough technical or fundamental information to make a significant judgement on the market's direction based on the TLI - in other words, the market may be volatile or other indicators, such as the news, might have a greater weighting on forecasting market direction.


How to interpret TLI values

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