Global Risk-On / Risk-Off Positioning Tone

Signal Summary:

• The CoT Market Tone signal is currently in a "Risk-On" regime as of 2026-01-20 (1).
• This indicates an expansion of speculative appetite.
• Conviction Band: Medium, Interpretation Confidence: High Confidence, Internal Conflict Flag: No.

Key Dynamics:

• The `net_tone` metric, representing the difference between crowded long and crowded short shares, registered 0.019074 (1).
• This positive shift pushed the robust z-score to 0.533811, moving the signal from "Neutral" to "Risk-On" (1).
• No internal offsets or tensions are observed.
• Conditional Invalidation: The "Risk-On" interpretation would be invalidated if the CoT Market Tone robust z-score falls below 0.5.

Scenario Balance:

• Base Case dominant: Continued "Risk-On" sentiment, supported by sustained positive net speculative positioning.
• Upside secondary: A transition to "Strong Risk-On", driven by further relative increases in crowded long positions.
• Downside residual: A reversion to "Neutral" or "Risk-Off" if net long crowding diminishes significantly.

Time Horizon & Aggregation:

• Time Horizon: Tactical (weeks), reflecting near-term shifts in speculative positioning from weekly CoT data (1).
• Aggregation Weight Hint: Medium, as this signal is a valuable gauge of broad speculative sentiment and tactical market shifts.

Macro Relevance:

• This signal primarily informs macro dimensions of Sentiment and Liquidity.
• It is sensitive to shifts across all cycle positions.
• It typically interacts with volatility signals (2) or credit conditions (3) to confirm risk regime transitions and contributes to cross-asset positioning composites (4).

Data & References:

• `df_cot_tone_daily` (CoT data) as of 2026-01-20 (1).
• The `net_tone` of 0.019074 and `CoT_Market_Tone_z` of 0.533811 for 2026-01-20 were most influential (1).
• Additional public datasets that would improve depth: VIX (2) and global equity index performance.