Question 1

What is a composite moving-average risk score?

Accepted Answer

The composite moving-average risk score, labelled Macro Risk Score on the 200-week moving average reports, turns price's distance from several long moving averages into a single 0 to 100% reading.

Question 2

How is the composite moving-average risk score calculated?

Accepted Answer

On weekly closes, it measures how far price sits from its 20-, 100- and 200-week simple moving averages, as percentages. For a coin, those distances are averaged; a two-year rolling z-score then asks how unusual today's distance is compared with the last two years; and a sigmoid function squeezes the result into 0 to 100%. The stock version scores each horizon separately before combining them, so the two are related but not identical models.

Question 3

How do you read the composite moving-average risk score?

Accepted Answer

Near 50% means price is about as far from its averages as has been typical for two years. Higher means unusually stretched above them; lower means unusually compressed. Because the window rolls, the score measures stretch against recent history, not valuation in any absolute sense.

Question 4

What can the composite moving-average risk score not tell you?

Accepted Answer

After a long rally the two-year window absorbs the higher prices, so the score can fall while price stays high. It is not a timing tool. For the lines themselves, see the 200-week moving average and how the 200-day differs .

What is a composite moving-average risk score?

How is the composite moving-average risk score calculated?

How do you read the composite moving-average risk score?

What can the composite moving-average risk score not tell you?

Other models explained