Methodology: how Witan Way reads market regimes

Philosophy

A systematic strategy does not know the future. It defines in advance how it will respond to observable market conditions.

Witan Way therefore starts by describing what markets are doing before applying any portfolio rule. The objective is not to forecast the next move, but to evaluate current conditions consistently using the same framework over time.

Markets change continuously. Trends develop and weaken. Momentum accelerates or fades. Participation broadens or narrows. Volatility changes. Different parts of a market can confirm one another or begin to diverge.

The methodology is designed to organise that information into a structured market regime rather than rely on a discretionary interpretation of each new market move.

What the rules measure

Every Witan Way regime reading is built from market data rather than a discretionary view of where markets should go next.

Depending on the asset class, the framework evaluates several dimensions:

• Trend: whether price behaviour is broadly constructive, neutral or deteriorating over the relevant horizon.
• Momentum: whether recent market behaviour is gaining or losing strength.
• Coherence: whether different measures of the same market are broadly confirming one another or beginning to diverge.
• Volatility and breadth: how stable the market environment is and, where relevant, whether market participation is broad or concentrated.
• Drawdown from the recent high: how far price has moved from a recent peak and whether that deterioration is becoming material.

No single measure determines the final regime on its own.

The relevant measures are combined according to predefined rules to produce a regime classification for each asset class.

These classifications are designed to describe current conditions consistently. They are not forecasts of where an asset will trade next.

How the models are built

Witan Way applies several systematic models across the asset classes followed by the framework.

The underlying concepts are deliberately familiar. Many have been studied extensively in academic finance, including trend, momentum, volatility and relative market behaviour.

Witan Way combines and calibrates these concepts within its own framework rather than reproducing a published academic strategy.

The objective is not to find one indicator that explains every market. Different asset classes behave differently, so the combination and calibration of rules can vary while the overall methodology remains consistent.

Where appropriate, Witan Way uses its own model components and classifications. The exact parameters and implementation rules are proprietary, but the methodology explains what the system observes, how outputs are classified and what limitations should be expected.

The methodology, the Charter and the strategy serve different purposes.

The methodology described on this page explains how Witan Way interprets market conditions.

The Weekly Charter uses that framework to publish free market regime readings and explain the evidence behind them.

The paid Witan Strategy is separate. It applies predefined portfolio rules to determine allocations.

The Charter therefore explains how Witan Way reads markets. It is not the strategy itself, and its published regime readings should not be interpreted as portfolio instructions.

For reporting purposes, strategy performance may be represented using a hypothetical $10,000 starting portfolio.

The amount is a reporting convention. It does not imply a minimum investment size or a recommendation regarding portfolio size.

Limits and assumptions

No systematic model removes uncertainty. Every rule family introduces trade offs, and every market regime can produce periods in which a model reacts imperfectly.

Trend and momentum rules can react after a move has already begun and may struggle in markets that reverse repeatedly without developing a sustained direction.

Volatility based measures can reduce exposure only after market conditions have started to deteriorate.

Breadth and coherence measures can weaken before headline prices do, but they can also produce signals that later reverse.

Different asset classes can respond differently to similar macroeconomic conditions, which is one reason the framework does not rely on a single universal signal.

Historical relationships can also change. A rule that has been useful across previous market environments may not behave the same way in the future.

The framework is therefore designed as a consistent decision process, not as a claim of certainty.

These limitations are part of the methodology and should be considered when interpreting both historical and current outputs.

Publishing cadence

Witan Way publishes two different types of output.

The Weekly Charter is published weekly. It provides the latest market regime readings and explains the evidence behind them. It is free to read and is intended to make the framework understandable and observable over time.

The Witan Strategy follows its own calculation and publication schedule. Strategy outputs are available to subscribers and are separate from the Charter.

The distinction matters.

A market regime describes current market conditions.

A portfolio allocation is the result of applying the strategy's portfolio rules.

One should not be inferred directly from the other.

Governance

Witan Way is rules based, but rules still require governance.

The objective is to prevent discretionary intervention from quietly replacing the system whenever market behaviour becomes uncomfortable or an alternative interpretation appears more attractive.

The framework follows several principles.

• No discretionary overrides: a published signal is not changed simply because a different outcome appears more plausible.
• Documented changes: material changes to model logic or parameters are documented before they are incorporated into published results.
• No retrospective rewriting: historical outputs are not altered simply to improve past results.
• No claim of certainty: the framework describes market conditions and applies predefined rules. It does not predict the future.

Governance does not eliminate model risk. Its purpose is to make the decision process consistent, traceable and less dependent on judgement after the fact.

Publication

This methodology page was first published in July 2026.

Material changes to the framework will be reflected on this page.

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Educational, not advisory. Witan Way Core is a pedagogical illustration: its logic is explained in full while its exact parameters remain private. Descriptive market- regime readings are not investment advice, recommendations, or forecasts, and past performance does not guarantee future results.