Once a month I post one read on the US stock market, here on this page. It takes about 2 minutes to read, and it answers the first question on my pre-trade checklist: is the broad market on my side, or am I fighting it?
No sign-up. The read is built from public data that anyone can check. It changes once a month.
This month’s read: AMBER
Read as of 4 October 2026. Still AMBER, as it was last month: the long trend is still up, but fewer stocks are joining in and junk-bond spreads have started to widen.
So how much weight should you give it? Personally, I let a read like this decide maybe 10 to 20% of what I do in a given week. The chart in front of me and my own rules decide the rest. Think of it as a weather report for the market. It tells you whether to pack an umbrella, and it cannot tell you where the next storm will land.
What goes into the read?
The read comes from a scorecard we built to track the market’s health. It weighs 15 public measures, and these 5 carry the most weight in the short-term read:
| What we measure | Why it matters | This month |
|---|---|---|
| The S&P 500 against its 200-day average | The simplest test of whether the long trend is up or down. Below this line, the read cannot be GREEN. | About 7% above it |
| 12-month momentum (the past year’s gain, leaving out the latest month) | Markets that have been rising tend to keep rising for a while. | Up about 14% |
| The direction of junk-bond spreads (the extra yield that riskier companies pay to borrow) | Bond traders often smell trouble before stock traders do. When that extra yield starts to widen, lenders are getting nervous. | Widening over the past 3 months |
| The VIX “fear gauge”, and whether short-term fear sits above longer-term fear | A rare spike in fear has often come near a low, so an extreme reading can count in the market’s favour. | Below its usual level, and short-term fear sits below longer-term fear |
| Breadth: the share of stocks trading above their 50-day average | It tells you whether a rally is carried by many stocks or by a handful. | About 37% |
Do note that the breadth figure is our own count, across about 215 large US stocks and sector funds, rather than the standard S&P 500 figure. We mention it because one of the rules below leans on it.
So what does each reading mean for a swing trader?
GREEN: the trend is up, and most measures agree. The tide is with you, so this is when you run your normal plan at your normal size. But GREEN is a tilt in your favour rather than a buy signal. Over every week since 2006, the S&P 500 rose in the 3 weeks after a GREEN read about 70% of the time, and in an average week about 63%, so the gap is real and fairly small. Helpful, then. Hardly a sure thing.
AMBER: the measures disagree. About 2 weeks in 3 land here. AMBER is normal. It is also a good time to be picky. A setup worth taking should be obvious on the chart, and if you have to squint to see it, you can let it go. You will miss a few trades this way, and missing a trade has never blown up an account.
RED: the trend is down, or the measures are flashing stress. The first question on the checklist fails for most long trades. That usually means fewer trades, smaller trades, or none at all. Cash is a position too. As I tell my students: when in doubt, stay out. Do note what RED is for. The market still rose over the next 3 weeks about 59% of the time after a RED read, which makes it a poor guide to direction. But the dips that followed a RED read ran deeper, about 3.6% on average against about 2.3% in a typical week, and spotting that is the job it does well. It warns you before a rough patch.
RED with a washout: fear at an extreme. Now and then the read is RED while fear hits an extreme and almost every stock is beaten down. This is rare. Those weeks were followed by the biggest average gain of any reading: up 68% of the time, and about 1.6% over 3 weeks against about 0.5% for a plain RED. A bounce like this runs against the trend. Size stays small, if you trade it at all. One more caveat. This rule leans on our own breadth count, the one measure we estimate rather than fetch, so give it a little less trust than the rest.
Want the routine this read plugs into?
This page answers one question. My free 15-minute swing trader’s checklist covers the rest of the day: the questions to ask before every trade, and the rules that keep you in the game while you learn.
How is the read made?
Every Sunday a script scores the 15 measures from free public sources, and this page takes the reading from the first Sunday of the month. The scorecard has also been run back over every week since 2006, 1,084 weeks in all, which is where the percentages above come from.
Two of the 15 measures, the ISM business survey and the AAII investor sentiment survey, have no free automated feed, so the read works without them. This month those two were too small to change the colour.
Before your next entry, ask yourself which colour the market was when you took it. And if you have been trading against the tide, what would change if you checked it first? The next read goes up in the first week of November.
To keep that record, my free trading journal has a column for the market read on every trade. Make your own copy of the journal here.
This page is for education only. It is not financial advice or a recommendation to buy or sell anything, and past readings do not guarantee future results. Trading involves risk of loss. Synapse is not licensed or regulated by MAS.