CLEAR - No acute stress. Full position sizing allowed (100%).
FRAGILE - Early warning signals active. Half position size (50%), add hedges.
BROKEN - Crisis conditions. Exit risk assets (0-25%), preserve capital.
DRIFT - Normal market dynamics. Macro trends dominate. Miners can express thesis.
FRACTURE - Volatility/funding stress active. Correlations breaking. Avoid levered expressions.
STAGFLATION - Inflation UP, Growth DOWN. Favors gold, energy. Avoid long-duration tech and long bonds.
INFLATIONARY BOOM - Inflation UP, Growth UP, Liquidity LOOSE. Favors commodities, cyclicals, high-beta hard assets.
LATE CYCLE INFLATION - Inflation UP, Growth UP, Liquidity TIGHT. Favors energy/value selectively. Risk rises as liquidity restricts.
GOLDILOCKS - Inflation DOWN, Growth UP. Favors growth equities, tech.
DEFLATIONARY CRASH - Inflation DOWN, Growth DOWN (and/or credit stress). Favors cash, long bonds.
STRESS > MODE > REGIME
1. If BROKEN -> Exit regardless of regime
2. If FRAGILE -> Half size regardless of regime
3. If FRACTURE -> Defensive expression only
4. Then REGIME guides direction
HY Spread - >3.5% = FRAGILE, >5.0% = BROKEN
VIX - >80th percentile (252-day) = FRACTURE warning
SOFR - >5.0% = funding stress
SRF - >$10B = Fed emergency lending active