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How Moodix Measures Market Sentiment

1.1  Why breaking news / market-moving news are the starting point

Financial markets move when fresh information upsets existing expectations. Moodix assumes that most large price swings and trend reversals are triggered by a very small fraction of the daily news flow—roughly 1 % of the ≈ 3 000 headlines it logs each day qualify as genuine *breaking news*. The platform therefore focuses on detecting those market‑moving items and quantifying their impact.

1.2  Where the measurement takes place?

All reactions are measured in the ES futures contract (S&P 500). ES trades 23 hours a day, is deep enough for billion‑dollar flows, and updates within milliseconds—ideal conditions for capturing market responses around the clock, unlike cash equities or options that close overnight.

1.3  From price spike to matched headline

  1. Detect the move: Moodix continuously watches ES. A sudden gap or spike flags a potential news reaction.
  2. Locate the cause: It inspects the headlines published in the same minute (typically 3–4 items; dozens during EU and US sessions).
  3. Validate: Analysts confirm the specific headline that plausibly triggered the move.
  4. Score the impact: The immediate price change (in basis points) becomes the Impact Score for that headline, and the event is stored together with its direction and topic tag.

1.4  Market memory: how long news matters

A headline influences prices for only so long. Empirically, the majority of reactions fade within ten trading days, and positive shocks are digested faster than negative ones. Moodix therefore treats ten days as the outer “memory” of the market and tracks two moving averages of its intraday index:

  • MA‑5 – the closer edge of memory
  • MA‑10 – the farther edge

These averages smooth the raw data while keeping the time window grounded in observed behaviour.

1.5  Constructing the Moodix Index™

For any period T (intraday, week, month, YTD) the Moodix Index is the running sum of all Impact Scores recorded inside T. The figure refreshes every 3–4 minutes—roughly the time it takes to vet a new headline—so users see sentiment almost in real time. A negative reading means bearish news flow dominated; a positive one signals bullish dominance.

1.6  Sentiment waves: RiskOn vs RiskOff

Comparing MA‑5 with MA‑10 reveals the prevailing current inside the ten‑day memory:

  • RiskOn wave – MA‑5 above MA‑10 (net bullish pressure)
  • RiskOff wave – MA‑5 below MA‑10 (net bearish pressure)

Waves typically last from several days to a few weeks, but a single “game‑changer” headline can flip them within hours—hence the continuous updates.

1.7  Coverage and speed

Moodix measures live from 08:00 UTC to 22:00 UTC (full EU and US sessions). Asian‑session headlines are analysed retrospectively each morning. Most items are processed in under four minutes; only ambiguous cases take up to 15 minutes to resolve.

1.8  Topic tagging and ranking

Every validated headline is assigned to a topic bucket (e.g., FED, Macro, Geopolitics). Topics themselves are ranked by the cumulative Impact Score of their recent headlines, showing at a glance which narrative—Covid‑19, Ukraine war, inflation—is currently driving markets.