SYSTEM OVERVIEW
MTS evaluates market conditions — not to predict the future, but to drive disciplined portfolio decisions. This page documents how the system works.
How MTS Thinks
MTS does not ask "Will the market go up?"
It asks "What state is the market in?
Will the market go up?
Traditional Thinking
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Prediction
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Forecast
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Opinions
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Emotion
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Timing guesses
What state is the market in?
MTS Thinking
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Environment
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Conditions
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Regimes
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Rules
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Systematic execution
The 3 Market Signals
The three core signals MTS uses to evaluate market conditions.
SIGNAL 01
Earnings Strength
Tracks whether corporate earnings trends are improving.
Measures profit growth and earnings momentum. Reflects the fundamental health of corporate performance.
ES
SIGNAL 02
Breadth Strength
Measures whether market participation is broad or concentrated.
Evaluates how many stocks are driving the market trend. Assesses the overall structural health of the market.
BS
SIGNAL 03
Sector Momentum
Identifies where capital is flowing across market sectors.
Tracks sector leadership and rotation patterns. Detects shifts in relative sector strength over time.
SM
From Signals to Market Regimes
MTS combines three independent signals into a single regime decision — fully rule-based
ES
BS
SM
Earnings Strength
ES
Breadth Strength
Sector Momentum
Combined Score Engine
Aggregates ES, BS, and SM into a single market score.
Market Regime Output
One of five predefined market regimes.
Strong-Up
Aggresive growth environment
Up
Stable bullish
trend
Neutral
Balanced or uncertain market
Down
Defensive, risk-reducing phase
Panic
Capital
preservation mode
How MTS Allocates Assets
Each market regime maps to a predefined asset allocation — fully systematic rule-based.
Strong-Up
SPXL
40%
SPYM
40%
TLT
0%
SGOV
20%
Aggressive Growth Mode
Up
SPXL
14%
SPYM
56%
TLT
0%
SGOV
30%
Growth-
Oriented
Neutral
SPXL
0%
SPYM
30%
TLT
20%
SGOV
50%
Growth-
Oriented
Down
SPXL
0%
SPYM
10%
TLT
40%
SGOV
50%
Defensive
Position
Panic
SPXL
0%
SPYM
0%
TLT
70%
SGOV
30%
Capital Preservation Mode
SPXL — Leveraged Equity Tactical return enhancer
SPYM — Core Equity Long-term growth engine
TLT — Treasury Bonds
Risk-off hedge asset
SGOV — Cash Equivalents
Capital preservation buffer
How Rebalancing Works
MTS follows a fixed, rule-based rebalancing process — fully systematic.
Data Captured
Weekly market data is recorded.
Signals Updated
MTS score signals are recalculated.
Regime Classified
Market regime determined by rules.
Porfolio Rebalanced
Holdings adjusted
as needed.
Risk Philosophy
Capital Preservation Over Emotion
Core Beliefs
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Avoid large losses above all
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Drawdowns destroy compounding
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Risk must adapt to market regimes
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Rules over emotions
How This Is Implimented
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Risk exposure adjusts automatically
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Defensive assets rise in uncertainty
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Rebalancing follows fixed rules
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No predictions, no discretion
What MTS Does NOT Do
Rules over opinions
NO
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Stock Picking
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Market Prediction
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News Trading
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Gut Feeling
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Rule Overrides
MTS focuses on discipline — not speculation.
Can Individuals Follow This?
Yes — MTS is built for everyday investors.
MTS is specifically designed so that anyone can follow it.
You do not need financial expertise, complex tools, or constant market monitoring.
All you need is the ability to follow clear and consistent rules.