us-market-bubble-detectorEvaluates market bubble risk through quantitative data-driven analysis using the revised Minsky/Kindleberger framework v2.1. Prioritizes objective metrics (Put/Call, VIX, margin debt, breadth, IPO data) over subjective impressions. Features strict qualitative adjustment criteria with confirmation bias prevention. Supports practical investment decisions with mandatory data collection and mechanical scoring. Use when user asks about bubble risk, valuation concerns, or profit-taking timing.
Install via ClawdBot CLI:
clawdbot install Veeramanikandanr48/us-market-bubble-detectorCritical Changes from v2.0:
Use this skill when:
English:
Japanese:
CRITICAL: Always collect the following data before starting evaluation
□ Put/Call Ratio (CBOE Equity P/C)
- Source: CBOE DataShop or web_search "CBOE put call ratio"
- Collect: 5-day moving average
□ VIX (Fear Index)
- Source: Yahoo Finance ^VIX or web_search "VIX current"
- Collect: Current value + percentile over past 3 months
□ Volatility Indicators
- 21-day realized volatility
- Historical position of VIX (determine if in bottom 10th percentile)□ FINRA Margin Debt Balance
- Source: web_search "FINRA margin debt latest"
- Collect: Latest month + Year-over-Year % change
□ Breadth (Market Participation)
- % of S&P 500 stocks above 50-day MA
- Source: web_search "S&P 500 breadth 50 day moving average"□ IPO Count & First-Day Performance
- Source: Renaissance Capital IPO or web_search "IPO market 2025"
- Collect: Quarterly count + median first-day return⚠️ CRITICAL: Do NOT proceed with evaluation without Phase 1 data collection
Score mechanically based on collected data using the following criteria:
Scoring Criteria:
- 2 points: P/C < 0.70 (excessive optimism, call-heavy)
- 1 point: P/C 0.70-0.85 (slightly optimistic)
- 0 points: P/C > 0.85 (healthy caution)
Rationale: P/C < 0.7 is historically characteristic of bubble periodsScoring Criteria:
- 2 points: VIX < 12 AND major index within 5% of 52-week high
- 1 point: VIX 12-15 AND near highs
- 0 points: VIX > 15 OR more than 10% from highs
Rationale: Extreme low volatility + highs indicates excessive complacencyScoring Criteria:
- 2 points: YoY +20% or more AND all-time high
- 1 point: YoY +10-20%
- 0 points: YoY +10% or less OR negative
Rationale: Rapid leverage increase is a bubble precursorScoring Criteria:
- 2 points: Quarterly IPO count > 2x 5-year average AND median first-day return +20%+
- 1 point: Quarterly IPO count > 1.5x 5-year average
- 0 points: Normal levels
Rationale: Poor-quality IPO flood is characteristic of late-stage bubblesScoring Criteria:
- 2 points: New high AND < 45% of stocks above 50DMA (narrow leadership)
- 1 point: 45-60% above 50DMA (somewhat narrow)
- 0 points: > 60% above 50DMA (healthy breadth)
Rationale: Rally driven by few stocks is fragileScoring Criteria:
- 2 points: Past 3-month return exceeds 95th percentile of past 10 years
- 1 point: Past 3-month return in 85-95th percentile of past 10 years
- 0 points: Below 85th percentile
Rationale: Rapid price acceleration is unsustainableLimit: +3 points maximum (REDUCED from +5 in v2.0)
⚠️ CONFIRMATION BIAS PREVENTION CHECKLIST:
Before adding ANY qualitative points:
□ Do I have concrete, measurable data? (not impressions)
□ Would an independent observer reach the same conclusion?
□ Am I avoiding double-counting with Phase 2 scores?
□ Have I documented specific evidence with sources?+1 point: ALL THREE criteria must be met:
✓ Direct user report of non-investor recommendations
✓ Specific examples with names/dates/conversations
✓ Multiple independent sources (minimum 3)
+0 points: Any criteria missing
⚠️ INVALID EXAMPLES:
- "AI narrative is prevalent" (unmeasurable)
- "I saw articles about retail investors" (not direct report)
- "Everyone is talking about stocks" (vague, unverified)
✅ VALID EXAMPLE:
"My barber asked about NVDA (Nov 1), dentist mentioned AI stocks (Nov 2),
Uber driver discussed crypto (Nov 3)"+1 point: BOTH criteria must be met:
✓ Google Trends showing 5x+ YoY increase (measured)
✓ Mainstream coverage confirmed (Time covers, TV specials with dates)
+0 points: Search trends <5x OR no mainstream coverage
⚠️ CRITICAL: "Elevated narrative" without data = +0 points
HOW TO VERIFY:
1. Search "[topic] Google Trends 2025" and document numbers
2. Search "[topic] Time magazine cover" for specific dates
3. Search "[topic] CNBC special" for episode confirmation
✅ VALID EXAMPLE:
"Google Trends: 'AI stocks' at 780 (baseline 150 = 5.2x).
Time cover 'AI Revolution' (Oct 15, 2025).
CNBC 'AI Investment Special' (3 episodes Oct 2025)."
⚠️ INVALID EXAMPLE:
"AI/technology narrative seems elevated" (unmeasurable)+1 point: ALL criteria must be met:
✓ P/E >25 (if NOT already counted in Phase 2 quantitative)
✓ Fundamentals explicitly ignored in mainstream discourse
✓ "This time is different" documented in major media
+0 points: P/E <25 OR fundamentals support valuations
⚠️ SELF-CHECK QUESTIONS (if ANY is YES, score = 0):
- Is P/E already in Phase 2 quantitative scoring?
- Do companies have real earnings supporting valuations?
- Is the narrative backed by fundamental improvements?
✅ VALID EXAMPLE for +1:
"S&P P/E = 35x (vs historical 18x).
CNBC article: 'Earnings don't matter in AI era' (Oct 2025).
Bloomberg: 'Traditional metrics obsolete' (Nov 2025)."
⚠️ INVALID EXAMPLE:
"P/E 30.8 but companies have real earnings and AI has fundamental backing"
(fundamentals support = +0 points)Phase 3 Total: Maximum +3 points
Final Score = Phase 2 Total (0-12 points) + Phase 3 Adjustment (0 to +3 points)
Range: 0 to 15 points
Judgment Criteria (with Risk Budget):
- 0-4 points: Normal (Risk Budget: 100%)
- 5-7 points: Caution (Risk Budget: 70-80%)
- 8-9 points: Elevated Risk (Risk Budget: 50-70%) ⚠️ NEW in v2.1
- 10-12 points: Euphoria (Risk Budget: 40-50%)
- 13-15 points: Critical (Risk Budget: 20-30%)Key Change in v2.1:
Verify the following when using:
□ Have you collected all Phase 1 data?
□ Did you apply each indicator's threshold mechanically?
□ Did you keep qualitative evaluation within +5 point limit?
□ Are you NOT assigning points based on news article impressions?
□ Does your final score align with other quantitative frameworks?Ignore "many news reports" or "experts are cautious" without quantitative data.
Always evaluate in this order: Phase 1 (Data Collection) → Phase 2 (Quantitative) → Phase 3 (Qualitative Adjustment).
Qualitative adjustment has a total limit of +5 points. It cannot override quantitative evaluation.
Do not readily acknowledge mass penetration without direct recommendations from non-investors.
❌ "Many reports on Takaichi Trade" → Media saturation 2 points
✅ Verify Google Trends numbers → Evaluate with measured values
❌ "Warning of overheating" → Euphoria zone
✅ Judge with measured values of Put/Call, VIX, margin debt
❌ 4.5% rise in 1 day → Price acceleration 2 points
✅ Verify position in 10-year distribution → Objective evaluation
❌ P/E 17 → Valuation disconnect 2 points
✅ P/E + narrative dependence + other quantitative indicators for comprehensive judgment
Risk Budget: 100%
Short-Selling: Not Allowed
Risk Budget: 70-80%
Short-Selling: Not Recommended
Risk Budget: 50-70%
Short-Selling: Consider Cautiously
Rationale for NEW phase:
This zone represents heightened caution without extreme defensiveness.
Market shows warning signs but not imminent collapse.
Maintain exposure to quality positions while building flexibility.
Risk Budget: 40-50%
Short-Selling: Active Consideration
Risk Budget: 20-30%
Short-Selling: Recommended
Only consider shorts after confirming at least 3 of the following:
1. Weekly chart shows lower highs
2. Volume peaks out
3. Leverage indicators drop sharply (margin debt decline)
4. Media/search trends peak out
5. Weak stocks start to break down first
6. VIX surges (spike above 20)
7. Fed/policy shift signals# [Market Name] Bubble Evaluation Report (Revised v2.1)
## Overall Assessment
- Final Score: X/15 points (v2.1: max reduced from 16)
- Phase: [Normal/Caution/Elevated Risk/Euphoria/Critical]
- Risk Level: [Low/Medium/Medium-High/High/Extremely High]
- Evaluation Date: YYYY-MM-DD
## Quantitative Evaluation (Phase 2)
| Indicator | Measured Value | Score | Rationale |
|-----------|----------------|-------|-----------|
| Put/Call | [value] | [0-2] | [reason] |
| VIX + Highs | [value] | [0-2] | [reason] |
| Margin YoY | [value] | [0-2] | [reason] |
| IPO Heat | [value] | [0-2] | [reason] |
| Breadth | [value] | [0-2] | [reason] |
| Price Accel | [value] | [0-2] | [reason] |
**Phase 2 Total: X/12 points**
## Qualitative Adjustment (Phase 3) - STRICT CRITERIA
**⚠️ Confirmation Bias Check:**
- [ ] All qualitative points have measurable evidence
- [ ] No double-counting with Phase 2
- [ ] Independent observer would agree
### A. Social Penetration (0-1 points)
- Evidence: [REQUIRED: Direct user reports with dates/names]
- Score: [+0 or +1]
- Justification: [Must meet ALL three criteria]
### B. Media/Search Trends (0-1 points)
- Google Trends Data: [REQUIRED: Measured numbers, YoY multiplier]
- Mainstream Coverage: [REQUIRED: Specific Time covers, TV specials with dates]
- Score: [+0 or +1]
- Justification: [Must have 5x+ search AND mainstream confirmation]
### C. Valuation Disconnect (0-1 points)
- P/E Ratio: [Current value]
- Fundamental Backing: [Yes/No - if Yes, score = 0]
- Narrative Analysis: [REQUIRED: Specific media quotes ignoring fundamentals]
- Score: [+0 or +1]
- Justification: [Must show fundamentals actively ignored]
**Phase 3 Total: +X/3 points (max reduced from +5 in v2.0)**
## Recommended Actions
**Risk Budget: X%** (Phase: [Normal/Caution/Elevated Risk/Euphoria/Critical])
- [Specific action 1]
- [Specific action 2]
- [Specific action 3]
**Short-Selling: [Not Allowed/Consider Cautiously/Active/Recommended]**
- Composite conditions: X/7 met
- Minimum required: [0/2/3/5] for current phase
## Key Changes in v2.1
- Stricter qualitative criteria (max +3, down from +5)
- Added "Elevated Risk" phase for 8-9 points
- Confirmation bias prevention checklist
- All qualitative points require measurable evidencereferences/implementation_guide.md (English) - RECOMMENDED FOR FIRST USEreferences/bubble_framework.md (Japanese)references/historical_cases.md (Japanese)references/quick_reference.md (Japanese)references/quick_reference_en.md (English)implementation_guide.mdbubble_framework.mdhistorical_cases.mdquick_reference.md (Japanese) or quick_reference_en.md (English)v2.0 Problem (Identified Nov 2025):
v2.1 Solution:
Key Improvements:
Core Principle:
"In God we trust; all others must bring data." - W. Edwards Deming
2025 Lesson:
Even data-driven frameworks can be undermined by subjective qualitative adjustments.
v2.1 requires MEASURABLE evidence for ALL qualitative points.
Independent observers must be able to verify each adjustment.
Version History:
Reason for v2.1 Revision:
Prevent over-scoring through unmeasured "narrative" assessments and double-counting.
Ensure all bubble risk evaluations are independently verifiable and free from confirmation bias.
Generated Mar 1, 2026
Financial advisors use the skill to assess bubble risk in US markets, providing data-driven insights for portfolio rebalancing, profit-taking, or hedging strategies. It helps clients navigate volatile periods by quantifying risk phases like 'Elevated Risk' based on indicators like Put/Call ratios and margin debt.
Hedge funds apply the skill to time short-selling or reduce exposure during bubble signals, leveraging strict quantitative thresholds for VIX and IPO data. The two-phase evaluation prevents confirmation bias, supporting mechanical trading decisions in fast-moving markets.
Brokerage platforms integrate the skill to answer user queries about market bubbles, offering automated reports based on collected data like breadth anomalies and price acceleration. It aids in educating retail investors on risk management during social phenomena like IPO floods.
Corporate treasurers use the skill to evaluate bubble risk before deploying cash reserves into equities, relying on mandatory data collection for indicators such as leverage and volatility. This informs timing for new entries or exits to protect company assets.
Offer the skill as a cloud-based service with real-time data feeds and automated scoring, charging monthly fees based on usage tiers. Revenue streams include API access for integration into trading platforms and advisory tools.
License the skill to investment firms for embedding into their proprietary systems, with customization options for threshold settings. Revenue is generated through upfront licensing fees and ongoing support contracts.
Develop a mobile app providing basic bubble risk scores for free, with premium features like granular risk phases and qualitative adjustment tools. Revenue comes from in-app purchases and ad placements for financial products.
💬 Integration Tip
Integrate with real-time data APIs for automatic Phase 1 collection, and ensure user interfaces clearly separate quantitative and qualitative phases to enforce the strict evaluation order.
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