Indicator Guide
How to read recurring MarketLayers indicators without treating them as standalone signals.
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Understanding MarketLayers Indicators
MarketLayers uses several quantitative indicators that may be unfamiliar to readers.
This guide explains how to interpret their direction, scale, reference level, and economic meaning.
The ranges below are intended as reader-facing interpretation guides. They are not disclosures of proprietary model thresholds, trading rules, weights, or model architecture.
Unless explicitly stated otherwise, a quantitative indicator should not be interpreted as a probability or as a standalone buy or sell signal.
1. Market-Wide Order-Flow State
MarketLayers evaluates market-wide microstructure through three separate reader-facing measures:
Aggressor Flow
Depth Pressure
Flow/Depth Alignment
Each uses a 0–100 scale with 50 representing a neutral state.
These are state indices, not probabilities or standalone buy/sell signals.
The most important question is not whether one measure is high or low by itself, but whether the three measures are confirming or diverging from one another.
2. Aggressor Flow
Aggressor Flow describes the balance of aggressive execution pressure across the market.
Reader-facing interpretation:
Above 50: execution pressure is tilted toward aggressive buying.
Around 50: execution pressure is broadly balanced.
Below 50: execution pressure is tilted toward aggressive selling.
Aggressor Flow reflects executed trading pressure, but it should not be interpreted alone.
A strong Aggressor Flow reading is more meaningful when Depth Pressure and Flow/Depth Alignment also provide confirmation.
3. Depth Pressure
Depth Pressure describes the state of displayed order-book depth across the market.
Reader-facing interpretation:
Above 50: the depth state is on the positive side of its neutral reference.
Around 50: broadly neutral.
Below 50: the depth state is on the negative side.
Depth Pressure is not a direct measure of investor intent.
Displayed orders can change, cancel, replenish, or fail to translate into executed trades and price movement.
For this reason, MarketLayers interprets Depth Pressure mainly in relation to Aggressor Flow and subsequent price behavior.
4. Flow/Depth Alignment
Flow/Depth Alignment describes whether aggressive execution and displayed depth are broadly confirming the same directional state across the market.
Reader-facing interpretation:
Above 50: positive directional agreement is more prevalent.
Around 50: directional agreement is broadly balanced.
Below 50: negative directional agreement is more prevalent.
A strong Aggressor Flow reading with weak alignment means the execution signal is not being fully confirmed by the broader depth structure.
Likewise, favorable depth without strong execution can indicate that visible support is not yet translating into aggressive demand.
The three measures should therefore be read together rather than independently.
The exact construction of the indicators, including internal transformations, sign conventions, weighting, and thresholds, remains proprietary.
5. Market Breadth Level
Market breadth measures how widely market participation is distributed across individual stocks.
The normalized breadth level used in MarketLayers is generally interpreted on a:
0 to 1 scale
with approximately:
0.50 = balance
Broadly:
Above 0.50: participation is relatively broad
Around 0.50: balanced participation
Below 0.50: participation is relatively narrow or weak
But the current level is only one part of the interpretation.
MarketLayers also evaluates:
Level → Direction → Velocity
For example:
A breadth level of 0.55 may appear healthy, but if its direction and velocity are deteriorating rapidly, the market may be moving toward a weaker state.
A breadth level of 0.40 may remain weak, but a strong positive slope can indicate that participation is beginning to recover.
6. Breadth Direction and Velocity
Breadth direction describes whether participation is improving or deteriorating.
Breadth velocity describes how quickly that change is occurring.
This distinction helps identify transition states.
For example:
Breadth above balance + sharply negative velocity
can indicate that participation is still relatively healthy in level terms but deteriorating quickly.
This is different from:
Breadth below balance + improving velocity
where participation remains weak but may be beginning to recover.
MarketLayers therefore avoids classifying breadth from level alone.
7. Z-Scores
A z-score expresses how unusual a current observation is relative to its historical reference distribution.
Unlike percentile ranks, z-scores do not have fixed upper or lower bounds.
The center is:
0 = historical mean
A general reader guide is:
around 0: close to normal
approximately +1 or -1: noticeable deviation
approximately +2 or -2: unusual deviation
increasingly large absolute values indicate increasingly unusual conditions
The sign depends on the indicator.
For example, a positive z-score can represent improvement for one variable and stress for another.
Therefore:
z = +2 does not automatically mean bullish
and
z = -2 does not automatically mean bearish.
The economic meaning of the underlying variable must always be considered.
A z-score is also not a probability.
8. Downside Damage Indicators
MarketLayers separates weakening participation from actual downside damage.
Examples include measures related to:
expanding short-term new lows,
expanding long-term new lows,
unusually large numbers of stocks suffering major daily declines,
and cross-sectional volatility.
Many of these measures are standardized relative to their own historical distributions.
A rising damage indicator becomes more meaningful when several different forms of damage begin expanding together.
One isolated spike does not necessarily establish a broad liquidation regime.
9. Cross-Sectional Volatility
Cross-sectional volatility measures how dispersed individual stock returns are across the market.
Higher dispersion means stocks are behaving more differently from one another.
However, high dispersion does not have one fixed interpretation.
It can arise from:
broad liquidation,
narrow leadership with many weak stocks,
speculative stocks surging while the rest of the market lags,
sector rotation,
or event-driven moves.
MarketLayers therefore interprets dispersion together with sector and stock composition.
10. System Warning Percentile
Some market-risk states are expressed as historical percentiles.
Reader-facing range:
0 to 100
Basic interpretation:
50: approximately the historical median state
75: higher than roughly three quarters of historical observations
90+: historically elevated
95+: very unusual historical state
A value of:
94
does not mean:
“There is a 94% probability of a market crash.”
It means the current model state ranks around the 94th percentile relative to its historical comparison set.
Freshness matters.
An elevated warning can reflect recent current stress or residual memory from an older stress event.
MarketLayers therefore examines the underlying drivers before deciding whether a warning is actively propagating.
11. Equity Relative Preference
Equity relative preference compares equity price pressure with a fixed cross-asset basket.
It describes relative price behavior.
It does not measure actual observed dollar transfers between asset classes.
A weakening equity-relative-preference reading means equities are becoming weaker relative to the comparison basket.
The next question is therefore:
Which other asset groups are improving relative to equities, and are they strengthening on their own?
MarketLayers uses this distinction to separate genuine destination strength from assets that are merely falling less than equities.
12. Cross-Asset Coupling
Cross-asset coupling measures how strongly major asset groups are moving together as a common market mode.
Its normalized level is bounded approximately between:
0 and 1
Higher values indicate stronger common movement.
Lower values indicate greater independence across asset groups.
Importantly:
high coupling is not automatically risk-off
and
low coupling is not automatically bullish.
Coupling is directionless by itself.
Changes in coupling are interpreted together with the direction of the underlying assets and the stability of the common mode.
13. Common-Mode Stability
Common-mode stability describes how similar the current cross-asset common structure is to the previously observed structure.
Reader-facing range:
0 to 1
Broadly:
near 1: common-mode identity remains very similar
lower values: the composition of the common mode is changing more substantially
For example:
falling coupling + stability near 1
can indicate that an existing macro common mode is gradually weakening or decoupling rather than being replaced by an entirely different regime.
This indicator is descriptive, not directional.
14. Upside and Downside Stock Ranks
MarketLayers uses separate upside and downside stock-ranking screens within the current comparison universe.
The upside rank identifies stocks with relatively stronger short-horizon upside characteristics.
The downside rank identifies stocks with relatively stronger short-horizon downside-risk characteristics.
These ranks are relative ranking outputs, not probabilities or expected-return forecasts.
For example, a stock ranked #1 on the upside screen does not mean that it has the highest expected return or a stated probability of rising.
Likewise, a high downside rank does not automatically mean the stock should be shorted.
A stock can rank strongly on both screens at the same time.
When this occurs, MarketLayers treats the stock as conflicted rather than forcing it into a clean bullish or bearish category.
A conflicted stock may have strong evidence for multiple short-horizon paths, so additional confirmation from price structure, persistence, sector behavior, and other contextual evidence becomes more important.
15. Signal Persistence
A single strong observation may be temporary.
Persistence describes how repeatedly a stock or sector has appeared in a meaningful quantitative state across recent sessions.
Repeated appearance generally provides more evidence than a one-day spike.
However, persistence alone is not enough.
A persistent demand signal with weak price performance creates an important question:
Is demand early, or is supply continuously absorbing it?
Price transmission is used to help answer that question.
16. Price Transmission
Price transmission asks whether an underlying quantitative demand signal has actually appeared in realized stock performance.
The distinction is central to MarketLayers.
Examples:
Strong signal + strong price response
suggests that demand is being transmitted into price.
Strong signal + weak price response
can indicate either:
an opportunity that remains relatively unpriced,
or persistent supply absorbing demand.
Neither interpretation is assumed automatically.
The subsequent price path helps resolve the divergence.
17. Signal Reference Price
Some stock analysis compares current price with an average price associated with prior signal periods.
This is a signal reference.
It is not:
an institutional acquisition price,
a cost basis,
or evidence of where any particular investor bought the stock.
It is simply a comparison point used to measure price transmission after earlier quantitative signals.
18. Expected Next-Session Range
Expected next-session range estimates the likely magnitude of a stock's next-session high-to-low trading range.
It is always non-negative and has no fixed theoretical upper bound.
For example:
Expected range = 8%
does not mean:
“The stock is expected to rise 8%.”
It means the model expects a relatively large high-to-low trading amplitude.
Direction must be determined from other evidence.
Because normal volatility changes across stocks and market regimes, MarketLayers usually interprets expected range relative to the current candidate cross-section.
Articles may therefore provide:
median expected range,
75th percentile,
90th percentile,
or other current-universe references.
These are more informative than applying one permanent percentage threshold to every market environment.
Financial and Institutional Context
The following indicators belong to a slower secondary layer.
They do not replace the primary market and order-book evidence.
19. Revenue-Growth Change
Revenue-growth change evaluates whether the company's year-over-year revenue-growth trajectory improved or deteriorated at the latest reporting event relative to the preceding event.
Broadly:
positive = improving growth trajectory
negative = deteriorating growth trajectory
The magnitude should be compared with other companies in the current research universe rather than interpreted from an arbitrary permanent threshold.
These are point-in-time transformed research values, not necessarily the raw percentage revenue growth reported in financial statements.
20. Revenue-Growth Acceleration
Revenue-growth acceleration asks whether the trajectory of revenue growth itself is speeding up or slowing down.
Broadly:
positive = acceleration
negative = deceleration
A company can therefore have positive revenue growth while showing negative acceleration.
Likewise, a company with weak current growth can show positive acceleration if the rate of deterioration is improving.
MarketLayers considers both the current trajectory and its change.
21. Cash-Flow Margin Context
Cash-flow variables describe the company's slower cash-generation trajectory.
MarketLayers focuses primarily on:
operating cash-flow margin context and trend,
free-cash-flow margin context and trend.
Positive trend values generally indicate improving cash-flow margins across recent reporting events.
Negative trends indicate deterioration.
However, these values are transformed point-in-time research variables.
They should be interpreted primarily through:
sign + trajectory + cross-sectional position
rather than as raw accounting percentages.
22. CFO-Margin and FCF-Margin Trend
CFO refers to operating cash flow.
FCF refers to free cash flow.
A multi-event slope describes the direction of the margin across recent reporting events.
Broadly:
positive slope = improving trajectory
near zero = relatively stable
negative slope = deteriorating trajectory
The magnitude is interpreted relative to the distribution of companies available on the same research date.
MarketLayers may provide current cross-sectional percentile references when useful.
23. FLOW_SCORE_RANK
FLOW_SCORE_RANK is a relative percentile-style measure used in the slower Financial and delayed institutional layers.
Reader-facing range:
0 to 1
with:
0.50 = median
A practical reader guide is:
0.80–1.00: strong
0.60–0.80: supportive
0.40–0.60: neutral
0.20–0.40: weak
0.00–0.20: very weak
For example:
FLOW_SCORE_RANK = 0.84
means the company's relevant slow-context measure ranks relatively high within the comparison universe.
It does not mean:
“There is an 84% probability that the stock will rise.”
FLOW_SCORE_RANK is a contextual relative ranking, not an entry signal.
24. Financial-Price Divergence
Financial-price divergence compares slower financial context with how much of that context appears to be reflected in current price behavior.
Reader-facing values are approximately centered around:
0
with a practical range generally around:
-1 to +1
A simple guide is:
above +0.50: large positive divergence
+0.20 to +0.50: meaningful positive divergence
-0.20 to +0.20: relatively small divergence
-0.50 to -0.20: meaningful negative divergence
below -0.50: large negative divergence
Broadly:
positive divergence
means slower financial context is stronger relative to what current price appears to reflect.
negative divergence
means price has moved ahead of slower financial context.
A positive divergence is not automatically bullish.
It can identify an under-reflected improvement, but weak price may also be warning that other forces are overwhelming the favorable slower context.
Divergence creates a research question rather than an automatic trading signal.
25. Delayed 13F FLOW_SCORE_RANK
The institutional FLOW_SCORE_RANK uses delayed institutional-holdings information.
Its reader-facing interpretation uses the same:
0 to 1 percentile-style scale
with:
0.50 = median
and the same general reader bands:
0.80–1.00: strong
0.60–0.80: supportive
0.40–0.60: neutral
0.20–0.40: weak
0.00–0.20: very weak
The critical difference is time.
13F filings describe holdings from an earlier reporting period and become known only after the filing is publicly available.
Therefore a high institutional rank means:
delayed institutional-holdings context is relatively strong
not:
institutions are buying the stock today.
26. 13F-Price Divergence
13F-price divergence compares delayed institutional-holdings context with current price behavior.
Interpretation is similar to financial-price divergence:
positive
= delayed institutional context is stronger relative to current price
negative
= current price has moved ahead of the delayed institutional context
Again, this is not a same-day institutional flow measure.
Because the underlying holdings information can be weeks or months old, MarketLayers explicitly considers the filing's actual availability date and age.
27. Qualified Support and Resistance Zones
MarketLayers groups qualified technical levels into support and resistance zones.
S1 is the nearest qualified support below current price.
R1 is the nearest qualified resistance above current price.
S2/S3 and R2/R3 describe deeper or more distant qualified zones when available.
These are structural reference areas, not guaranteed turning points.
28. Live S1 Distance
Current distance from live S1 measures how far the latest price is from today's S1 structure.
MarketLayers may show both:
percentage distance from the live S1 center,
and ATR-normalized distance from the live S1 center.
The ATR version makes distances more comparable across stocks with very different volatility.
A stock that is many ATRs above support is structurally different from a stock sitting close to the same support zone even if both previously produced a valid support reaction.
29. Support Confirmation Type and Freshness
Support confirmation type describes how the recent support episode was validated.
A bullish support interaction may qualify through same-session reclaim behavior.
A bearish or doji interaction requires a meaningful lower-wick defense and next-session confirmation.
Confirmation freshness is usually expressed as the number of completed trading sessions since the valid support confirmation.
More recent confirmation does not guarantee better future performance, but it helps distinguish a fresh support event from an older historical reaction.
30. Confirmed Support vs. Current Live S1
Confirmed support records the structure defended during the historical support episode.
Current live S1 is today's nearest qualified causal support.
The two can differ because daily and weekly market structure evolves.
MarketLayers therefore reports them separately rather than assuming an old support price remains the current decision boundary.
31. Support-Zone Continuity and Geometry Drift
Support-zone continuity describes how similar the historical defended support geometry is to today's live S1 geometry.
Geometry drift records movement in the zone through time, often normalized by ATR for comparability.
A shift in the live zone is not automatically a failure. It is diagnostic evidence that the structural map has evolved.
A genuine breakdown is evaluated from the defended price structure and subsequent price behavior, not from geometry drift alone.
32. Static Fibonacci Confluence
The production support/resistance map uses static Fibonacci levels derived from causal daily and weekly swing structure.
Nearby levels from different timeframes can form a confluence zone.
Common Fibonacci ratios may include 0.236, 0.382, 0.500, 0.618, and 0.786.
A confluence zone is treated as an area of structural evidence rather than as a mathematically exact future turning price.
33. Volume Profile Context: POC, HVN, and LVN
Volume Profile is a secondary/contextual layer in the support/resistance framework.
POC refers to the price area with the greatest volume concentration in the evaluated profile.
HVN refers to a high-volume node.
LVN refers to a low-volume node.
Formation-period Volume Profile can provide historical memory around a structural zone, while the current profile helps describe where recent trading activity has concentrated.
These measures do not by themselves prove support, resistance, accumulation, or distribution.
34. Zone Quality / Rank Context
The support map can attach relative quality or rank context to a zone using the evidence available to the production model.
A higher relative zone-quality reading means that the structural area has stronger evidence within the framework.
It is not a probability that price will hold, and the exact internal scoring formula and weights remain proprietary.
35. Reward/Risk to R1 vs. S1
A reader-facing reward/risk reference may compare the simple price distance from current price to R1 with the distance from current price to S1.
It is a geometric distance ratio.
It is not a forecast, probability, position-sizing rule, or recommendation to use S1 as a stop or R1 as a target.
36. ATR-Normalized Distance
ATR, or Average True Range, is used to normalize price distances for current volatility.
For example, a one-dollar move can be trivial for one stock and unusually large for another.
Expressing distance in ATR units makes support extension, resistance distance, and geometry drift easier to compare across stocks.
ATR normalization does not make the underlying level more reliable; it only changes the scale used to describe distance.
37. Moving Averages and Bollinger Context on Step14 Charts
The Step14 production charts use a small set of conventional overlays for orientation.
The daily panel may show the 5-day moving average, 20-day Bollinger Bands, and 200-day moving average.
The weekly panel may show the 5-week moving average, 20-week Bollinger Bands, and the daily 200-day moving average sampled onto weekly dates.
These overlays provide trend and volatility context. They are not the primary source of the qualified S1/R1 structure.
How to Use These Indicators Together
No indicator in this guide is intended to be used in isolation.
MarketLayers generally follows an evidence hierarchy:
Primary market signal
→ persistence
→ price transmission
→ market and sector confirmation
→ expected range
→ financial trajectory
→ delayed institutional context
→ public information
A slower variable can strengthen or weaken confidence in an existing thesis.
It does not create a primary thesis by itself when the primary quantitative evidence is weak.
The most informative situations often occur when multiple layers disagree.
Those disagreements are treated as hypotheses to test rather than signals to blindly follow.
Important Reminder
Reader-facing balance levels and interpretation bands are provided to make the research understandable.
They are not proprietary production thresholds and should not be treated as mechanical trading rules.
Market conditions change, historical relationships can fail, and the same numerical reading can have different implications depending on its surrounding structure.
This research is designed for 3–10 trading-day swing setups. The signals and conclusions may not transfer to intraday trading or longer-horizon investing.
MarketLayers is provided for informational and research purposes only and does not constitute investment advice.