The audio file from the Gemini DeepMind team provides more detail on the INSTAT System. This report is an overview.
INSTAT is a simple but powerful, data-driven tool designed to provide a clear and objective snapshot of market sentiment for any financial instrument, such as stocks, ETFs, or currencies. By analyzing historical price and volume data, INSTAT offers a consolidated perspective to help traders and investors make more informed decisions, cutting through the noise of market emotions and short-term news reactions.
How INSTAT Works: The Core Principle
INSTAT’s strength lies in its multi-layered analysis. It synthesizes signals from a wide array of well-known technical indicators, which are grouped to assess both the trend direction and the underlying momentum of an asset.
The system’s logic is built on two foundational pillars:
Trend Analysis (The “What”): This group, heavily weighted in the final calculation, uses a series of moving averages to determine the prevailing market trend—whether it’s up, down, or sideways. This emphasizes the system’s belief that the overall trend is a critical factor.
Momentum Analysis (The “How”): This group consists of various oscillators that gauge the strength of the trend and identify potential conditions where an asset is overbought or oversold, suggesting a possible reversal.
INSTAT doesn’t just average these signals. It first creates a summary for each group and then combines them, giving more importance to the trend analysis to produce a final, overarching rating.
A Multi-Timeframe Perspective
To offer a complete picture, INSTAT doesn’t rely on a single chart timeframe. It performs its analysis across eight unique timeframes, from intraday (5-minute) to long-term (monthly). These are then consolidated into three summary scores:
AT (Algorithmic Trading) Score: Reflects ultra-short-term sentiment driven by algorithmic reactions to news.
ST (Swing Trading) Score: Captures the medium-term outlook used by swing traders.
IN (Institutional) Score: Represents the long-term trend followed by institutional investors.
The final INSTAT score is a weighted sum of these three components, deliberately giving more influence to longer-term data, which is considered more significant for sustained price movements.
Clear and Actionable Ratings
Based on the final INSTAT score and its components, the system generates an easy-to-understand recommendation:
STRONG BUY / BUY: Indicates strong upward momentum and bullish alignment across multiple timeframes.
HOLD / MONITOR: Suggests a period of consolidation or market indecision.
NEUTRAL / AVOID: Signals a lack of clear direction or weakening momentum.
BEARISH / SELL: Points to a confirmed downward trend.
Key Takeaway
The INSTAT System serves as a disciplined, fact-based decision-support tool. It is designed to keep investors honest by providing an unbiased, mathematical perspective on market sentiment, reminding us that no single opinion is more important than the collective message of the market itself.