Market Trend State

Defining "Trend" in ForecastingIn predictive analysis, a trend represents the sustained, long-term trajectory of a specific metric (your forecast variable, $y$) over an extended period.
Rather than focusing on day-to-day noise or short-term volatility, a trend isolates the foundational direction—identifying whether the overall average value is climbing or falling.
It is important to note that a trend rarely moves in a straight line; its rate of growth or decline naturally fluctuates over time as market dynamics shift.
Neo's Market State Evaluation LayerTo make sense of these shifting trajectories in the equity markets, Neo utilizes a specialized evaluation layer called Market State.
This layer tracks the broader trend and categorizes it into one of five distinct Trend States.

Secular Markup:

Requires full bullish alignment across all 3 EMAs ($price > $20 > $50 > $200), positive slopes across the board, and a bullish structure (Higher Highs/Higher Lows) with no recent Lower Lows breaking the trend.

Secular Markdown:

Requires full bearish alignment across all 3 EMAs ($price < $20 < $50 < $200), negative slopes across the board, and a bearish structure (Lower Highs/Lower Lows) with no recent High Lows breaking the trend.

Markup:

Relaxed requirements (Secular Markup) focusing only on the short-to-medium term. Catches emerging trends where $price > $20 > $50 and slopes are positive, even if the $200 EMA hasn't caught up yet.

Markdown:

Identifies bearish structure ($price < $20 < $50), negative EMA slopes, and recent Lower Lows / Lower Highs.

Neutral:

Catches choppy price action. This triggers if the slopes are flat (absolute slope near zero), or if there are conflicting HH/LL structures like broadening wedges/triangles, or if the price is sandwiched between the 20 and 50 EMAs.

Transition:

Serves as the default fallback state (uncertain). If the stock doesn't fit neatly into the other 5 structural states (e.g. reversing through EMAs but not fully aligned yet), it stays here.