Introducing the VSIA Monthly Market Indicator: Our Market Dashboard
At Vedanta Sentinel, we believe good investment decisions start with a clear, in-depth read of the world, not just one or two headlines, but a structured view across the full landscape of what actually drives asset returns. That's the purpose of our newly launched VSIA Monthly Market Indicator.
A Framework, Not a Forecast
The indicator tracks 16 data points across four categories, each color-coded to reflect the current backdrop: green for favorable, blue for neutral, yellow for caution, and red for unfavorable. Taken together, the picture that emerges tells us something useful about the investment and economic environment — not what markets will do next week, but whether the backdrop, on balance, looks constructive or challenging when looking out over an intermediate-to-longer time horizon.
Think of it less like a prediction and more like a weather map. A mostly green map doesn't guarantee sunshine, but it does mean conditions are generally favorable. A map heavy in red and yellow tells you to prepare accordingly.
What the Four Categories Tell Us
Equity Index Valuations (#1–4)
Market Valuation is one of the most important determinants of long-term equity returns. When equities are priced cheaply relative to long-term fundamentals, the odds of strong long-term returns improve significantly. When they are expensive, future returns are more likely to be lower. Stretched valuations don't mean markets will go down imminently, but they do matter enormously when thinking about what markets can deliver beyond the next quarter or next year.
Market Technicals (#5–8)
Valuations can stay stretched for a long time. That's where market technicals come in. These data points capture the intermediate-term trend (a few weeks to a few quarters) and the current state of equity markets, what is actually happening with prices right now, and whether the market's internal dynamics are healthy or beginning to deteriorate. They complement the valuation picture by telling us what the market is doing, not just what it should theoretically do.
Our proprietary technical indicator (#5, VSIA Composite SENTINEL Indicator) is a proprietary multi-input technical indicator designed to assess broad market risk conditions. It aggregates readings across eight key technical inputs, such as market breadth, momentum, and volatility measures of key indices such as S&P 500, and generates a reading about the technical health of the market. We call it the VSIA SENTINEL Indicator.
Economic Data (#9–12)
The economy is the engine behind asset returns across virtually every asset class. Strong growth, healthy employment, and resilient consumer and business activity tend to create favorable conditions for corporate profitability and risk assets. Conversely, weakness in these measures is often an early signal that the investment environment is becoming more difficult. We consider eco-data as one of the key ingredients in the framework for understanding where asset returns are likely headed.
Macro & Policy (#13–16)
The final category examines the policy and financial conditions backdrop. How is the Federal Reserve positioned, are they tightening or easing? What is the fiscal policy backdrop? Are credit spreads signaling stress in the financial system? Is inflation running hot or cooling? These factors shape the cost of capital and the availability of credit, two inputs that have a significant influence on asset prices.
How We Use It
We use these (and other) data points when making asset allocation decisions for our client portfolios. A reading dominated by greens supports a more constructive posture toward risk assets. A reading heavy in yellows and reds suggests a more cautious, defensive approach may be warranted.
Updated every month and publicly available on our website, this indicator is part of our commitment to showing our work and communicating our investment thinking clearly to the clients and families we serve.
View the current reading: www.vedantasentinel.com/market-indicator (based on January 2026 data)
Important Disclosure: The VSIA Monthly Market Indicator is provided for informational and educational purposes only and should not be used as the sole basis for making investment decisions. This indicator represents our internal framework for evaluating market conditions and does not constitute personalized investment advice. Market conditions can change rapidly, and past indicator readings are not indicative of future results. Investment decisions should be made in consultation with a qualified financial advisor who understands your individual financial situation, goals, and risk tolerance. Full Disclaimer.
