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The method

Like a weather forecaster, not a fortune teller.

A weather forecaster doesn't tell you whether it will rain: they tell you how much each force in play weighs, how coherent the picture is and what would change it. Sinottica works the same way on markets.

6

families of sources

0–40

weight per factor

45

threshold below which nothing goes out

07:00

bulletin, Italian time

The four stages

From noise to read, every morning.

01 · 04:00

Collection

On-chain and exchange flows, derivatives (funding, open interest, skew), order-book microstructure, analyst revisions, positioning, macro calendar. Frequencies from one minute to one day.

02 · 05:30

Normalization

Every series becomes a deviation from its own regime, not an absolute value: funding at −0.012% on crypto, or a −2% earnings revision on a US stock, weigh differently in a calm market and in a stressed one. Dirty data is discarded, not interpolated.

03 · 06:15

Weighting

Each factor is given a weight from 0 to 40 based on how it has held up historically on that market and in that regime. Weights are summed by direction: whatever stays below the threshold is, by definition, noise.

04 · 07:00

Read and invalidation

The text is written only from the computed weights: no invented factors. The invalidation condition stays monitored until the close, then the read goes into the record.

What the model looks at

Six factor families, weighted market by market.

No family carries a fixed weight: what counts is how it has held up historically on that market and in that regime. On BTC funding often weighs twice what it does on a stock; on NVDA it is order revisions that matter.

FamilyExample factorsCryptoStocksIndices
Flows On crypto: net exchange deposits, ETF flows. On indices and US stocks: index fund inflows, buybacks, sector flows high medium high
Derivatives On crypto: funding and open interest on perpetuals. On indices and US stocks: skew, dealer gamma exposure, options expiries high medium high
Microstructure Order-book depth and absorption. On crypto: cascading liquidations. On indices and US stocks: opening and closing auctions, volume at key levels high low medium
Fundamentals Earnings and order revisions, margins, guidance high medium
Positioning Aggregate leverage, surveys, systematic fund exposure medium medium high
Macro and calendar Expected rates, central bank liquidity, dated events medium medium high

“High, medium, low” is the maximum weight that family can reach on the market, not the weight it carries today.

The role of AI

Quantitative first, language after.

The heavy lifting artificial intelligence does at Sinottica is statistical: identifying the regime, estimating the weights, measuring uncertainty. The language model only steps in at the end, to put an already computed result into plain English — and it cannot write anything the numbers do not say.

TaskWhich model does itHow we keep it in check
Identify the regime Latent-state model on volatility, liquidity and correlations The states are few and named; every read declares which regime it was born in
Build the factors Deterministic transformations of the series, hand-written and versioned No automatically generated features: if we cannot explain it, it does not go in
Estimate the weights Gradient boosting tree models, one per market and per regime Walk-forward validation, with a quarantine period between training and test
Measure uncertainty An ensemble of models with different initializations and windows Disagreement between members lowers confidence; below 45 nothing goes out
Write the read Language model constrained to the weights and factors from the computation Automatic check: if the text cites a factor that is not there, the read is not published
Close and score Deterministic rules on the horizon and the noise threshold The criterion is fixed when the read goes out; the outcome enters the record unrevised

Against overfitting

A factor enters the model only if it holds up across several regimes and several similar markets. The ones that work on the recent past alone are dropped, however good they look in backtest.

Against hallucinations

The language model has no access to the markets: it only receives the table of weights already computed. It cannot invent a factor, because it knows none beyond the ones we hand it.

Against drift

Models are retrained on a regular schedule and compared with the previous version over the same period. If the new one does not do better, it stays on the bench.

Confidence

How coherent the picture is with itself.

Three ingredients: how much the factors agree with one another, how clean the data feeding them is, and how well the dominant factor has held up historically. The result is a number from 0 to 100.

0–44No read: flat position
45–59Weak read: a single leg holds the picture up
60–74Solid read: several factors agree
75–100Very coherent picture: rare, and fallible all the same
Invalidation

Every read is born with its own expiry date.

The invalidation condition is a measurable fact, not an impression: a level, a threshold, a number of sessions. When it triggers, the read closes — and it does not count as a miss, it counts as a voided read.

Crypto example

“Voided if funding moves back above zero for 48 consecutive hours, or if open interest on perpetuals climbs back above the levels of 18.07.”

Indices and US stocks example

“Voided if the index closes two sessions above 5,480, or if the twelve-month earnings revision turns positive again before options expiry.”

You get the alert the moment the condition is met, not the day after.

The limits, stated

What Sinottica does not do.

It does not say how much to risk

Position size, leverage and stops depend on your capital and your tolerance. We do not know them and we do not guess them.

It does not predict shocks

A hack, a sudden bankruptcy or an unexpected political decision are not in the previous day's data. When they happen, open reads are voided.

It does not chase intraday

The minimum horizon is a few days. Below that scale noise dominates the weights and the method stops making sense.

It does not promise percentages

The public record shows how it has gone so far. It is not a guarantee about the future, and anyone who gives you one is selling you something else.

Want to see the method at work?

The Monday bulletin is free and contains one full read, weights included.

Get the bulletin See the record