The Mannarino Market Risk Indicator

If you take the 10yr yield and multiply that by the DXY, then divide that by 1.61 you get X.

The higher X is, the more we need to pay attention to what is going on.

As examples.

Right now this X is roughly 82. This is a low number and represents a low risk for stocks.

At the 1987 stock market crash, this number was 488, and at the 08’ meltdown it was nearly 200. The Dot-Com bubble/crash this number was 360

As a general rule, the higher the X in this calculation, the more risk averse we need to be.

Today we stand at roughly 82, no where near a danger zone but again, we must also look at the current environment.

To me, the stock market remains RISK ON.


Lions, as you know- we are going to utilize a new way to gauge market risk, The Mannarino Market Risk Indicator. We are using a scale from 50 to 400 to gauge risk. We derive a “risk number” using this equation- we multiply the DXY by the 10yr Yield and get X. Then we divide X by 1.61

At the time of this writing the Mannarino Market Risk Indicator stands at around 86.

Here is a general scale of how to gauge risk.

A reading from 50-100 = LOW RISK

A reading from 100-200 = MODERATE RISK

A reading above 200 = HIGH RISK

A reading above 300 = EXTREME RISK.

Keep in mind that we need to take in the current environment as a whole, but again in general, the lower the MMRI, (Mannarino Market Risk Indicator), the more risk in we should be taking on in equities. The higher the MMRI the less risk we take.

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