Mixed pauses top-down changes. It is not a fifth regime; the model keeps the last confirmed target until the evidence produces an actionable reading.
The dashboard may therefore show one regime with the highest score without naming it as current. The evidence has identified a leader but has not earned an allocation change.
Why a regime becomes Mixed
The market regime draws from four independently weighted domains: participation and risk appetite, credit and refinancing, rates and inflation pricing, and funding and the broad dollar. Each domain receives 25% of the combined score.
A named regime needs more than the highest number. The model reports Mixed when leading scores tied across different allocation mappings, the winner leads by fewer than two points, required input coverage falls below 70%, or a required input is stale.
There is one deliberate exception: when Goldilocks and Reflation share the lead, the nowcast reports Risk On. Those two regimes describe different economic paths but use the same portfolio targets, so uncertainty between them should not prevent an otherwise valid allocation change. A move from a defensive setting to Risk On still must persist for five consecutive closes before it becomes actionable.
Weak confidence should not masquerade as precision. The Federal Reserve’s Financial Stability Report also organizes risk across several categories instead of leaning on one market price. The dashboard has a much narrower job, but the discipline is similar.
What happens to the top-down targets
Suppose Goldilocks and Inflation are tied. The model does not average their allocations. It also does not let alphabetical order choose Goldilocks. It reports Mixed and keeps the last confirmed regime.
The same rule applies to an Inflation and Deflation tie. If the prior confirmed regime was Inflation, the model keeps the Inflation targets. If it was Deflation, it keeps the Deflation targets.
| Held regime | Stocks | Gold | Bitcoin |
|---|---|---|---|
| Goldilocks, Reflation, or Risk On | 60% | 30% | 10% |
| Inflation | 30% | 15% | 5% |
| Deflation | 30% | 30% | 5% |
If no prior confirmed regime exists, the model uses Deflation as a defensive fallback. That produces 30% stocks, 30% gold, and 5% bitcoin before VAMS.
VAMS still has the last word on each sleeve
Holding the top-down target does not freeze the whole portfolio. Stocks, gold, and bitcoin still have separate VAMS states. Bullish applies 100% of the top-down target, Neutral applies 50%, and Bearish applies 0%. Unused exposure goes to cash.
A Mixed regime can still coexist with a changing allocation. The top-down layer may be held while one asset’s trend deteriorates or improves. AQR’s trend-following research provides the background for treating price behavior as evidence instead of waiting for a perfect macro story.
Why not invent a halfway target?
A halfway target sounds reasonable until you ask which halfway target to use. A Goldilocks and Inflation tie could produce several arbitrary blends. Every extra blend adds another parameter that must be explained, tested, and maintained.
Holding the last confirmed target is simpler. It also resembles ordinary rebalancing discipline: change the portfolio when the rule calls for a change, not merely because today’s evidence looks untidy. Vanguard’s rebalancing guide and the SEC’s asset-allocation guide both treat allocation as a process rather than a reaction to every market move.
CFA Institute’s asset-allocation framework makes the same constraint visible from another angle: portfolio weights belong to a defined objective and governance process. A close daily score should not silently rewrite that process.
How to read it on the dashboard
Read Mixed as “hold the top-down target and wait for better evidence.” Then check three things: the last confirmed regime, the ambiguity reason, and each sleeve’s VAMS state.
Mixed is deliberately boring. A close call should not be allowed to dress up as certainty and move real money.