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Market Risk Classifier · Event Risk Brief · 2025-004

Concluded · 2025-05-282025-05-27 · inputs through 2025-05-23 closeLive report →
What happened · scored by what the market did next
✓ The scare faded

The system classified STABLE and the scare passed: no escalation and no hard fall followed.

The Call

STABLE (WATCH) was in effect. VIX was up 29% in five sessions; the call did not move.

Volatility jumped this week; the system classifies it as not a regime change.

RISK SHAPE
WHIPSAW
WHIPSAWSHIFTINGELEVATEDSHOCKCRISIS
WHAT THE SYSTEM DID
HELD THROUGH IT
the system classifying STABLE while VIX rises 25%+ in a week
LAST 20 SESSIONS · VIX (ORANGE) + S&P 500 (WHITE)
SHIFTINGSTABLETRIGGER WINDOW · LAST 5 SESSIONS25.117.2VIX5,9645,529S&P04/2805/0905/23
VIX · CBOE VOLATILITY INDEX
22.29
5-SESSION CHANGE +29.3%
S&P 500
5,802.82
5-SESSION CHANGE -2.6%
CONCLUDES WHEN EITHER · 3 CONDITIONS+
(a) The system escalates to a more severe state (escalated).(b) VIX's 5-session change falls back below +25% with no escalation (the scare faded).(c) No escalation within 10 sessions and the S&P 500 falls 5%+ within 20 sessions (the call was wrong).

Classification uses the prior session close (2025-05-23).

Historical Precedent50 MATCHES SINCE 2012
QUERY: risk shape == STABLE (WATCH) AND VIX 5-session change >= +25% · 3,369 SESSIONS SINCE 2012 · 50 MATCHES
MEDIAN PATH · 50 MATCHES · INDEXED TO 100 AT THE MATCHED MORNING
TRIGGER WINDOWTHE MATCHED MORNING · TODAY'S POSITION10077VIX102.0100.0S&P−20 SESSIONS0+15 SESSIONS

Median forward path of all 50 matched mornings. Historical pattern, not a forecast.

94%
THE SYSTEM CLASSIFIED STABLE CORRECTLY OR ESCALATED WITHIN DAYS · 47 OF 50 MATCHES
6%
THE SYSTEM WAS WRONG · CLASSIFIED STABLE THROUGH A 5%+ S&P 500 FALL · 3 MORNINGS: 2014-09 · 2015-07 · 2022-04
HISTORICAL MARKET CLASSIFICATION OUTCOMES
66%
28%
6%
33 OF 50The scare faded. The system classified STABLE and no hard fall followed
14 OF 50The system escalated within days. It issued a more severe classification within 10 trading sessions
3 OF 50The system was wrong. It classified STABLE while the S&P 500 fell 5% or more within 20 sessions: 2014-09 · 2015-07 · 2022-04
↳ CLOSEST MATCHES TO TODAY · PRIOR-CLOSE VIX >= 22 (TODAY: 22.29) · 6 OF THE 50+
2 OF 6The scare faded.
3 OF 6The system escalated within days.
1 OF 6The system was wrong. 2022-04

Free · issued pre-open when conditions warrant

Event Log1 SESSION
2025-05-27 · DAY 1 · STABLE · VIX 22.29 (+29.3%) · SPX 5,802.82 (-2.6%)
Sector ImplicationsTAP TO EXPAND +

10-DAY FORWARD RETURN VS STABLE PERIODS · STRESS-CLASSIFIED DAYS

CYCLICAL BASKET

+1.9pp

XLE · XLB · XLF · XLI · XLY

DEFENSIVE BASKET

-0.5pp

XLV · XLP · XLU

10-DAY FORWARD RETURN DIFFERENTIAL BY SECTOR (STRESS VS STABLE)

XLEEnergy
+2.9pp
XLFFinancials
+2.7pp
XLBMaterials
+1.7pp
XLKTechnology
+1.7pp
XLIIndustrials
+1.2pp
XLYConsumer Disc.
+0.9pp
XLUUtilities
+0.6pp
XLPStaples
-0.6pp
XLVHealthcare
-1.5pp
Sector returns measured from the classification date forward. Backtest: 2012-2024, 154 stress-classified days. Out-of-sample: 2025-2026, 24 stress-classified days. Historical analysis, not investment advice.

This report is preserved at its permanent address · the live report continues every trading morning →

Outcome definitions, system methodology, and the full classification record

Validation & Methods →

Historical base rates since 2012: history, not a forecast. Past classifications do not guarantee future accuracy. Research use only. Mindforge is not a registered investment adviser. Full terms: mindforge.tech/terms · Methodology: mindforge.tech/validation-and-methods

Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms · Methods

Event Risk Brief 2025-004 | Mindforge | Mindforge