Which factors does Closelook track?

Momentum against low volatility as the headline pair (SPMO over SPLV), with the ratio’s percentile, twenty- and sixty-day rate of change and a regime label.

What does defensive rotation mean?

That low-volatility stocks are outperforming momentum stocks: money is moving from recent winners to stable names. It often precedes an index decline and often ends before the index bottoms.

How is a factor regime different from a market regime?

A market regime describes the whole market — risk-on, risk-off, transition — from cross-asset behaviour. A factor regime describes which kind of stock is leading inside the equity market. The two can disagree, and the disagreement is informative.

Glossary term

Factor Regime

Which style of stock is leading the market — momentum, low volatility, value, quality, size — read from the ratio of factor funds to each other. Closelook’s gauge tracks momentum against low volatility; when low volatility leads, the market is rotating defensively whatever the headline index says.

AI-generated — produced automatically by Closelook’s systems under this site’s editorial policy.

What it means

Factors are the persistent characteristics that explain returns across stocks: momentum (recent winners), low volatility (stable names), value (cheap on fundamentals), quality (high profitability), size. Funds exist for each, so the market’s current preference can be read as a ratio of two of them. Momentum over low volatility is the sharpest single pair: it rises when the market chases winners and falls when it hides in stable names, which usually happens before the index itself turns.

A regime is the state the ratio is in — leadership, transition, defensive rotation — judged by the ratio’s level against its history and its direction over the last twenty and sixty days.

Why it matters for the AI trade

The AI trade is the momentum factor: its names are the recent winners in every screen. When the momentum-over-low-volatility ratio fell 2.7% in twenty days and 7.9% in sixty in September 2026, from the 88th percentile of its range, the gauge read “defensive rotation — low-vol leading” while the Nasdaq-100 was still within 1% of its Thursday line. That is what a crowded factor unwinding looks like before the index shows it, and it is the same signal as the de-grossing entry reads from the shorts.

How Closelook uses it

The factor regime board publishes the SPMO/SPLV ratio, its percentile, its 50-day trend and the regime label nightly; it feeds the weather panel on every stock page next to the Money Temperature and the sector rotation read.

Common questions

Which factors does Closelook track?: Momentum against low volatility as the headline pair (SPMO over SPLV), with the ratio’s percentile, twenty- and sixty-day rate of change and a regime label.
What does defensive rotation mean?: That low-volatility stocks are outperforming momentum stocks: money is moving from recent winners to stable names. It often precedes an index decline and often ends before the index bottoms.
How is a factor regime different from a market regime?: A market regime describes the whole market — risk-on, risk-off, transition — from cross-asset behaviour. A factor regime describes which kind of stock is leading inside the equity market. The two can disagree, and the disagreement is informative.