Thermometer
Each thermometer shows where today's reading ranks in its own history. It describes a position in history, not a buy or sell signal.
Bull or Bear? All the Thermometers Together
Average where each thermometer sits relative to its own long-term norm and you get one temperature from 0 to 100: the closer to 100, the further most indicators are above their norms and the hotter the market; the closer to 0, the further below and the colder. It describes the present, does not predict the future, and is not a buy or sell signal.
Each Indicator Right Now
The Temperature over the Past Ten Years
Market cycles vary in length, and one often takes several years (a common rule of thumb is 5 to 10), so this chart covers the past ten years. Each dot is one month's combined temperature, showing which stretches were warming and which were cooling; ▼ marks past peaks and ▲ past troughs. No emotional stage is marked here: whether the market is on the way up or down can't be judged reliably at the time.
History: Prices Colored by Temperature
The deeper the red, the hotter it was at the time; the deeper the green, the colder. Hover to see each month's temperature and mood level.
What History Says
Group every month by its temperature at the time and see what prices actually did over the next 1 and 3 years.
Method: figures that grow with the economy (turnover, margin debt, market cap ÷ GDP) are first compared with their own 10-year average; those with a fixed norm (price ÷ 10-year average, distance from the high, financial stress, share of accounts trading, foreign buying share) are used as they are. Each is then ranked against its whole history (a description after the fact, not a number available at the time) and averaged with equal weights; each month averages only the indicators available then, so Taiwan starts in 1997. The equal weighting and the 20 / 40 / 60 / 80 mood bands are this site's own choices, not an academic or official standard. We do not judge whether the market is on the way up or down: backtests show that judging by the price trend turned only 1 to 8 months after each historical peak or trough. Returns are price changes only, without dividends.
US Stocks
US Stocks: Price ÷ 10-Year Average
The further the price runs above its long-term average, the hotter it is. High does not mean it will fall right away (see Chapter V, Section 6).
US Stocks: Distance from the High
A fall of more than 20% from the high is commonly called a bear market.
US Buffett Indicator (Corporate Equity ÷ GDP)
The bigger the stock market is relative to the economy, the hotter. This ratio has trended up over the decades, so it is compared with its own 10-year average rather than its whole history.
US Margin Loans
How much is borrowed to buy stocks, compared with its own 10-year average: the higher the multiple, the more people are buying on borrowed money. We don't divide by total market value, because market value keeps growing and the ratio would always look low. Data: Federal Reserve Z.1.
The Temperature of Money: Rates, Stress and the Currency
Financial Stress Index (St. Louis Fed, Monthly Average)
Computed by the St. Louis Fed from 18 weekly series (7 interest rates, 6 yield spreads and 5 other indicators), with the average since 1993 set to 0. Above 0 means financial markets are more stressed than usual; below 0, calmer than usual. It measures how tense markets are, not how high interest rates are: when rates are high but markets are steady, it can still sit below 0. The calmer it is, the hotter it counts on the thermometer (people worry less about risk).
US Federal Funds Rate
The cost of money. Compared with the longer-run rate Fed officials project (often called the neutral rate): 0.5 points or more above counts as tight, 1.5 or more as very tight, and the same distances below as loose and very loose (bands set by this site).
US 10-Year Minus 2-Year Treasury Spread
A negative spread (an inverted curve) has often come before recessions, though the lag varies.
NT Dollars per US Dollar
The lower the number, the stronger the NT dollar (fewer NT dollars per US dollar). The NT dollar usually strengthens when foreign money pours in and weakens when it leaves. Within 3% of the 10-year average counts as near average (bands set by this site).
Taiwan Stocks
Taiwan Stocks: TAIEX ÷ 10-Year Average
The book's original '10-year-line ratio'. I once treated 150% as a bubble signal; in hindsight it meant selling far too early.
Taiwan Stocks: Distance from the High
A fall of more than 20% from the high is commonly called a bear market.
Taiwan Stocks: Turnover ÷ 10-Year Average
We use the average per trading day because months have different numbers of trading days (February has the Lunar New Year). A surge in turnover signals overheated enthusiasm and a slump a quiet market, though panic selling in a crash can also swell turnover.
Taiwan Stocks: Margin Debt
How much is borrowed to buy stocks (listed and OTC), compared with its own 10-year average: the higher the multiple, the more people are buying on borrowed money. We don't divide by total market value, because giants such as TSMC have swollen it and the ratio would always look low. Data: Central Bank of the ROC (Taiwan).
New Brokerage Accounts in Taiwan (Monthly)
A surge in new accounts means many newcomers are rushing into the market. The TDCC open data cover only the last three years, so no longer average is available; 30% or more above the median counts as warm and 30% or more below as cool (bands set by this site).
Taiwan: Accounts That Traded This Month
The author's gauge of crowd enthusiasm in the book: the hotter retail trading gets, the more accounts trade each month.
Foreign Net Buying in Taiwan (Last 3 Months)
Heavy foreign buying means hot money flowing in; heavy selling means money pulling out. Data: Taiwan Stock Exchange open data.
Taiwan Buffett Indicator (Listed Market Cap ÷ GDP)
With giant exporters such as TSMC, Taiwan's ratio naturally runs higher than the US's, and it has trended up over the decades, so it is compared with its own 10-year average.
How to Read These Numbers
A percentile shows where today's reading sits in its own history: 80 or above is very hot, 60–80 warm, 40–60 normal, 20–40 cool and below 20 very cold (the same scale as the bull–bear temperature; the bands are this site's own). It only describes where today stands compared with the past; it is not a buy or sell signal — the backtests in Chapter V show that selling when prices look expensive leaves you poorer.
For the reasoning, see Chapter VI (the Market Thermometer Checklist) and Chapter V (Why I No Longer Sell at the Highs), or open the century-long replay in the Data Lab.
Long-Term Trends
Sources: Federal Reserve Economic Data (FRED) — federal funds rate and its longer-run projection, Treasury yields, corporate equity market value, GDP, the St. Louis Fed Financial Stress Index, the NT dollar exchange rate and broker-dealer margin loans (Z.1) — and Prof. Robert Shiller's long-term S&P 500 data (S&P 500 is a trademark of S&P Dow Jones Indices LLC). Accounts that traded each month: Taiwan Stock Exchange, Statistics of Securities Market, compiled by the author. Taiwan open government data: Central Bank of the ROC (Taiwan) 2026, Financial Statistics Monthly tables 28B “Stock trading and price index by period” (EG27M01) and 28A “Margin trading of listed stocks by period” (EG25M01); Directorate-General of Budget, Accounting and Statistics 2026, “National income statistics, quarterly”; Taiwan Depository & Clearing Corporation 2026, “Changes in centralized custody accounts” (OpenAPI 2-1); Taiwan Stock Exchange 2026, “Trading value of the three major institutional investors” (BFI82U); versions downloaded in October 2026.
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Data are delayed and may contain errors. This page is for family financial education, not investment advice.