OPEN-SOURCE SCRIPT
SentinelIndex
Overview
The Sentinelindex is a comprehensive risk-assessment tool designed to expose the divergence between market price action and underlying macroeconomic reality. While the S&P 500 might print new highs, the Sentinelindex looks beneath the surface to see if the move is backed by liquidity, economic stability, and institutional conviction.
This indicator aggregates three non-correlated pillars of market health into a single, easy-to-read 0-100 normalized score.
The Three Pillars of the Sentinel Score
Liquidity (M2 Money Supply YoY): Markets run on fuel, and that fuel is money. By tracking the Year-over-Year change in the M2 Money Supply (via FRED data), the indicator penalizes the score when liquidity is contracting or stagnating, signaling a "dry" environment where rallies are harder to sustain.
Economic Clock (Yield Curve 10Y-2Y): The 10Y-2Y spread is the most reliable recession predictor in history. However, the real danger isn't just inversion—it's de-inversion. This script specifically monitors the critical phase where the curve returns to positive territory (0 to 1.0), a zone historically associated with market pivots and economic shifts.
The Shadow (Insider Sell/Buy Ratio): The ultimate "Smart Money" signal. This component tracks the behavior of corporate insiders (CEOs, CFOs). When those with the most information are selling into a rally at a high ratio, the Sentinel Score spikes, revealing a "Distribution Phase" that retail traders often miss.
How to Interpret the Score
0 - 40 (Green): Healthy Accumulation. High liquidity, stable macro, and calm insiders. The trend is likely supported by fundamentals.
40 - 75 (Orange): Tactical Caution. Divergences are forming. Liquidity is tightening or the Yield Curve is shifting. The ice is getting thinner.
75 - 100 (Red): Distribution Alert. Maximum risk. While prices may be high, the "Smart Money Shadow" indicates institutional exiting and macro headwinds. Capital protection becomes the priority.
Instructions for Users
Manual Input: Due to the proprietary nature of aggregate Insider Trading data, the Insider Sell/Buy Ratio must be updated manually once a week (typically every Monday) in the script settings. We recommend using a 1-week aggregate ratio from reliable sources like OpenInsider.
Data Source: This indicator automatically fetches real-time data from the Federal Reserve (FRED). Ensure your TradingView account has access to FRED symbols (default for most users).
Best Timeframes: Daily (D) or Weekly (W) for high-level macro analysis.
The Sentinelindex is a comprehensive risk-assessment tool designed to expose the divergence between market price action and underlying macroeconomic reality. While the S&P 500 might print new highs, the Sentinelindex looks beneath the surface to see if the move is backed by liquidity, economic stability, and institutional conviction.
This indicator aggregates three non-correlated pillars of market health into a single, easy-to-read 0-100 normalized score.
The Three Pillars of the Sentinel Score
Liquidity (M2 Money Supply YoY): Markets run on fuel, and that fuel is money. By tracking the Year-over-Year change in the M2 Money Supply (via FRED data), the indicator penalizes the score when liquidity is contracting or stagnating, signaling a "dry" environment where rallies are harder to sustain.
Economic Clock (Yield Curve 10Y-2Y): The 10Y-2Y spread is the most reliable recession predictor in history. However, the real danger isn't just inversion—it's de-inversion. This script specifically monitors the critical phase where the curve returns to positive territory (0 to 1.0), a zone historically associated with market pivots and economic shifts.
The Shadow (Insider Sell/Buy Ratio): The ultimate "Smart Money" signal. This component tracks the behavior of corporate insiders (CEOs, CFOs). When those with the most information are selling into a rally at a high ratio, the Sentinel Score spikes, revealing a "Distribution Phase" that retail traders often miss.
How to Interpret the Score
0 - 40 (Green): Healthy Accumulation. High liquidity, stable macro, and calm insiders. The trend is likely supported by fundamentals.
40 - 75 (Orange): Tactical Caution. Divergences are forming. Liquidity is tightening or the Yield Curve is shifting. The ice is getting thinner.
75 - 100 (Red): Distribution Alert. Maximum risk. While prices may be high, the "Smart Money Shadow" indicates institutional exiting and macro headwinds. Capital protection becomes the priority.
Instructions for Users
Manual Input: Due to the proprietary nature of aggregate Insider Trading data, the Insider Sell/Buy Ratio must be updated manually once a week (typically every Monday) in the script settings. We recommend using a 1-week aggregate ratio from reliable sources like OpenInsider.
Data Source: This indicator automatically fetches real-time data from the Federal Reserve (FRED). Ensure your TradingView account has access to FRED symbols (default for most users).
Best Timeframes: Daily (D) or Weekly (W) for high-level macro analysis.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.