In our research, we noted that the structural and functional topology of financial networks is distinctly similar to that of the human brain. Several scholars have noted that the brain-market systems are topologically isomorphic that is they show striking similarities in properties. The brain-market analogy is possibly rooted in attributes of a certain scale-invariant complex network.
Fluctuations in these systems contain patterns, trends, and vital information that drastically change when there is a phase transition especially when an external shock transverses through the networks from central to peripheral nodes or vice versa that can give us an early warning signature of extreme events such as an epileptic stroke in the brain or a crash in financial markets.
We found dynamic and spectral properties in our data with predictive power. So we used methods in Quantum physics and financial engineering to quantify them as tradable signals. We have hundreds of signals of multi-frequencies using several advanced analytical methods. Thus we call the engine of our proprietary system the 'Financial Brain'.
This graph compares the FIX Index, S&P 500 (SPX), and VIX Index from 2022 to 2024, highlighting the FIX Index's predictive power, which consistently spikes months ahead of S&P 500 crashes, unlike the VIX, which lags. The long-term dataset (1995–2024) shows the FIX Index’s robust predictive power across major historical events, including the dot-com bubble (2003), financial crisis (2008), trade conflicts (2016), Bitcoin crash, COVID crash (2020), and the stagflation period (2022). Unlike short-term indicators, the FIX Index has consistently signaled market volatility and downturns, irrespective of the economic or technological context, from the housing-driven 2008 crisis to recent trade and crypto disruptions. The past 30–40 years underscore the index’s reliability, affirming its adaptability across evolving market infrastructures with technological advancements, and high-speed lelectronic trading. This reinforces confidence in the FIX Index as a future-ready, resilient volatility predictor.
This graph presents a 5-year view (2019–2024) of the FIX Index alongside the S&P 500 (SPX) and VIX, highlighting the FIX Index’s predictive edge in identifying volatility spikes before major market events like the COVID-19 crash in 2020 and subsequent downturns in 2022 and 2024. Unlike the VIX, which typically lags, the FIX Index consistently provided early warnings, detecting heightened risk months before the S&P 500’s declines. Particularly in early 2020, during the COVID-induced "black swan" event, the FIX Index showed a significant spike, underscoring its robustness in flagging volatility even for unpredictable, externally driven crises.
For a more zoomed-in perspective of a more recent period, we look at the last two years of data. When the FIX Index spikes above a threshold of 2, often reaching 4 before reverting, it signals a pending market correction within weeks. Key moments—like in July 2022, April 2024, and July 2024—illustrate the FIX Index's lead on market downturns, especially in high-volatility growth sectors.
The FIX Growth Index provides essential signals for market recovery and growth, effectively marking the bottom of corrections and offering guidance on entry points for long-term positions. Unlike indicators focused solely on predicting crashes, the FIX Growth Index aids in identifying optimal moments to re-enter the market post-correction. A long-term view confirms its reliability; following downturns in 2008, 2016, 2019, 2020, 2022, and 2024, the index consistently spiked, signaling recovery and sustained growth. This ability to indicate market bottoms makes it a valuable tool for investors seeking strategic entry after corrections, as it rises and stabilizes in alignment with growth phases.
The FIX Market Pulse offers real-time insights into market health and short-term fluctuations, displaying two main patterns over recent years: a steady baseline and periodic spiked epochs. Each epoch shows a distinct signal: if the peak precedes the trough, the market generally declines (e.g., May 2022 and September 2023), while a trough preceding the peak often indicates a market rise (e.g., March 2020 and March 2023). A steady baseline during shifts suggests stability in core sectors, hinting at an eventual reversion. To further refine analysis, the FIX Baseline Index tracks evolving support and resistance levels, complementing the Market Pulse to clarify trend direction and strength.
The Market Baseline Index outlines critical support and resistance levels that define the market's fluctuating reference points. For example, from February 2022 to July 2023, it centered around the 4,000-point level on the S&P 500, where the market oscillated before entering a correction. By July 2023, a "phase shift" occurred, moving the baseline to 4,500, which the market aligned with, indicating a new stability level. Subsequently, further shifts led to new baselines at 5,000 and 5,500, which the market respected in turn. While not predictive, this index confirms shifts in market fundamentals and, when combined with leading indicators, helps validate and identify new stability zones.
The FIX Cyclic Indices track periodic cycles in the market, helping to identify recurring patterns or seasonality that can affect stock prices. By decomposing various FIX indices into their frequency components, we can detect both low and high-frequency signals, revealing key insights. First, these indices highlight in-phase and out-of-phase correlations within specific frequency components, indicating periods of alignment or divergence between the market and the indices. For instance, the signals show in-phase movements during select periods (e.g., August 2022, January 2023, October 2023, and August 2024),