Investing 101

Since TOGGLE was generating a number of individual insights for global assets every day, we were curious to see if aggregating these insights provided any understanding of potential price action in the overall market. 

Guess we were right. 

Our analysis of the indicator showed that the TLI led the S&P 500 by 12 trading days, with a 50% forward-looking correlation and a historical hit rate of 86%. 
 
Below, the first chart shows the TLI shifted 12 days overlayed with the performance of the S&P 500. As you can see, there is a clear correlation between the two.
 
The other charts show the forward performance of the indicator, specifically the Granger Correlation chart on the right. This chart shows a significant 50% forward correlation across the entire domain (i.e. including non critical periods). 
 
We have identified that at key thresholds of +/- 0.15, the TLI has had an 86% hit rate and a forward correlation to the S&P 500 of 62% (which in mathematical terms, can be considered as strong). 
 
More information about the inputs of the indicator and analysis of the thresholds, can be found in the next few articles.

![tli 080222](https://storage.googleapis.com/toggle-webcm-prod/https://storage.googleapis.com/toggle-webcm-prod/aggregate_toggle_signals_spx_6_7_8_stars_5_5a36f22a8d/aggregate_toggle_signals_spx_6_7_8_stars_5_5a36f22a8d.png)

What is the TLI and why was it invented? 

 What is the Toggle Leading Indicator? 

The TOGGLE Leading Indicator 

TOGGLE takes a vast universe of financial and market data, looks for relationships between drivers and price action, and then generates insights on those that have had meaningful historical behaviour. 
 
The team wanted to come up with a single indicator that could be used to gauge US markets. The research culminated into the Toggle Leading Indicator aka the “TLI”; an aggregate measure based on insights across 5,000 US equities. The goal was to help investors understand prevailing market sentiment and likely price action in the S&P 500 - essentially creating a leading indicator based on historical data. 

![tli 011323](https://storage.googleapis.com/toggle-webcm-prod/https://storage.googleapis.com/toggle-webcm-prod/spx_classic_tli_64eb08b3ce/spx_classic_tli_64eb08b3ce.png)

The TLI chart can be found on the [MY TOGGLE page](https://toggle.ai/my-toggle) and in every[ Friday edition of the daily newsletter](https://toggle.ai/daily-market-brief). 

Check out this video for a detailed walkthrough! 

[Video](https://www.youtube.com/embed/hsLeahGewrc)

Introduction to the TLI

What is the Toggle Leading Indicator?

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