BubbleTrouble.watch - Early Warning System for Market Bubbles
⚠️ EDUCATIONAL PURPOSES ONLY - NOT INVESTMENT ADVICE ⚠️

Methodology v1.0

Version Control

All methodology changes are logged in the Changelog before implementation. Historical signals always reflect the methodology active at that time.

Data Sources

All price data is sourced from Yahoo Finance via their public API. Data is refreshed when you load the page.

Signal Calculation

Step 1: Calculate % from 52-Week High

For each stock, we calculate:

Signal = (Current Price - 52 Week High) / 52 Week High × 100
        

Step 2: Composite Calculation

Each tier composite is calculated as a weighted average:

Tier 1 Composite (Infrastructure)

CRWV × 0.30 + DLR × 0.25 + EQIX × 0.25 + GLW × 0.20
            

Tier 2 Composite (Equipment)

NVDA × 0.40 + AVGO × 0.25 + AMD × 0.20 + ANET × 0.15
            

Tier 3 Composite (Narrative)

MSFT × 0.30 + GOOGL × 0.25 + META × 0.25 + AMZN × 0.20
            

Step 3: Signal Thresholds

Tier Green Yellow Red
Tier 1 (Infrastructure) Above -15% -15% to -30% Below -30%
Tier 2 (Equipment) Above -20% -20% to -35% Below -35%
Tier 3 (Narrative) Above -25% -25% to -40% Below -40%

Debt Stress Indicators

In addition to price signals, we monitor debt market indicators for Tier 1 companies:

Metric Source Yellow Threshold Red Threshold
Tech IG Issuance QoQ SIFMA, Bloomberg -30% to -50% < -50%
BBB Credit Spreads ICE/Bloomberg 200-300 bps > 300 bps
Revenue Warnings Company filings N/A Any Tier 1
Hyperscaler Capex MSFT/GOOGL/AMZN/META filings Flat Declining
Credit Downgrades S&P/Moody's/Fitch Any Tier 1 Multiple
Failed Issuance Market reports N/A Any pulled deal
CoreWeave CDS Market data 300-500 bps > 500 bps

Alert Level Determination

Level Condition Interpretation
LEVEL 0 All tiers Green Normal conditions
LEVEL 1 Tier 1 Yellow Early warning
LEVEL 2 Tier 1 Yellow/Red, Tier 2 showing stress Caution
LEVEL 3 Tier 1 Red, Tier 2 Yellow/Red Cascade forming
LEVEL 4 All tiers Red Full cascade

Limitations

  • This methodology is based on only 2 historical examples
  • The framework may not apply to macro-driven corrections
  • Thresholds are based on historical analysis and may need adjustment
  • Debt stress indicators are manually updated and may be delayed
  • This is not a trading system - educational only