KBMeter financial indicators guide

KBMeter analyzes each financial instrument through several “health indicators”, just like a complete medical check-up. This guide explains what each item in our reports means.

Main Scores

Health Score

What it is: The overall thermometer of the instrument. It summarizes the overall technical health condition in a single number from 0 to 100.

How to read it:

• 70-100: Excellent condition, strong
• 55-70: Good health, positive
• 45-55: Average, neutral
• 30-45: Below average, weak
• 0-30: Critical condition, very weak

Practical example: A Health Score of 70 is like having all your blood tests within normal range. A score of 35 indicates something is wrong and requires attention.

Trend Score

What it is: Indicates whether the instrument is rising, falling, or moving sideways in the medium term.

How to read it:

• Above 55: Bullish trend (rising)
• 45-55: Sideways (neither up nor down)
• Below 45: Bearish trend (falling)

Practical example: Think of a boat. The Trend tells you if you’re sailing with the current (bullish) or against it (bearish).

Momentum Score

What it is: Measures the speed and strength of the movement. A trend can be bullish but slow, or bullish and fast.

How to read it:

• Above 60: Strong movement, acceleration
• 40-60: Normal movement
• Below 40: Weak movement, deceleration

Practical example: If Trend is the boat’s direction, Momentum is the speed. You can be heading north (positive trend) but very slowly (low momentum).

Volatility Score

What it is: How much the instrument “swings” up and down. High volatility means large price swings.

How to read it:

• Above 65: High volatility, rough seas
• 35-65: Normal volatility
• Below 35: Low volatility, calm seas

Note: Volatility is neither good nor bad in itself. It indicates the level of risk and opportunity.

Practical example: A flight with turbulence doesn’t mean the plane will crash, but that the journey will be bumpier.

Volume Score

What it is: How many “people” are participating in that instrument’s market. High volumes mean many are buying and selling.

How to read it:

• Above 60: Strong participation, reliable movement
• 40-60: Normal participation
• Below 40: Low participation, less reliable movement

Practical example: A restaurant that’s always full (high volume) is probably good. One that’s always empty (low volume) might be good too, but you have less confirmation.

Future Score

What it is: Our most important indicator. It tries to anticipate how the situation will evolve in the coming weeks, based on historical patterns.

How to read it:

• Above 60: Positive signal for the future
• 40-60: Neutral, stable situation
• Below 40: Caution signal

The divergence: Always compare the Future Score with the current Health Score.

• Future > Health: Possible improvement ahead
• Future < Health: Possible deterioration ahead
• Future ≈ Health: Stable situation

Practical example: Health is today’s photo. Future is the weather forecast for next week.

“Signed” Values

Next to each score you’ll also find a “signed” value (e.g.: Health 65, signed +30).

What it is: The “norm” value (0-100) tells you the intensity. The “signed” value also tells you the direction.

How to read it:

• Positive signed (+): The strength is bullish
• Negative signed (-): The strength is bearish
• Signed close to zero: Neutral

Practical example:

• Health 70 with signed +40 = strong and bullish ✅
• Health 70 with signed -40 = strong but bearish ⚠️
• Health 50 with signed +5 = average, slightly positive

Special Signals

Exhaustion

What it is: Signals when a movement (bullish or bearish) is losing strength and might be close to ending.

Two types:

• Exhaustion UP: The rally is running out of steam, possible pause or correction ahead
• Exhaustion DOWN: The decline is running out of steam, possible bounce ahead

How to read it: When the signal is “active”, it means the current movement might be in its final stages. It doesn’t mean immediate reversal, but that fuel is running low.

Practical example: A car can keep going with the low fuel warning light on, but you know it will have to stop eventually.

Regime

What it is: Classifies the market “climate” the instrument is in.

Four types:

Practical example:

• Trend = straight highway
• Mixed = road with some curves
• Range = roundabout (going in circles)
• Turbulence = mountain road with hairpin turns

Seasonality

What it is: How the instrument has historically behaved during this time of year.

How to read it: We tell you which month is historically best and worst, and how it’s performing compared to the seasonal average.

Note: Seasonality is a statistical tendency, not a certainty. Past performance doesn’t guarantee future results.

Predictive Patterns

What it is: Specific technical situations that have had a predictable outcome in the past.

How to read it: For each pattern we tell you:

• Condition: What must occur (e.g.: “Health > 68”)
• Occurrences: How many times it happened in the past
• Success Rate: What percentage of the time it worked

Example: “Mean Reversion from Highs” with 71% success rate means that when Health exceeds 68, in 71% of historical cases a correction followed.

Percentiles

What it is: Where the current value stands compared to the instrument’s entire history.

How to read it:

• 90th percentile: Current value is higher than 90% of all historical values (very high)
• 50th percentile: Exactly at the historical average
• 10th percentile: Current value is lower than 90% of all historical values (very low)

Practical example: If your Health Score is at the 85th percentile, it means the instrument is doing better than it has been 85% of the time in its history. It’s a rare and favorable condition.

VBTA Indicators (Volatility-Based Technical Analysis)

In our analysis and score calculations, we also use VBTA indicators. These are technical tools — reworked from the research of Kirk Northington (Volatility-Based Technical Analysis, 2009, Wiley) — that analyze volatility behavior and the internal structure of price movement, identifying conditions that traditional trend and momentum indicators tend to overlook. KBMeter uses four specific VBTA signals.

(SD) Structural Divergence — Trend Structure Diverges from Price

Structural Divergence (SD) measures the internal consistency of a trend: not only its direction, but whether the components supporting it are actually confirming the price movement. When Structural Divergence is active, price continues to rise (or fall) but the underlying structure is weakening — signaling that the trend may be losing energy before price visibly reverses. It is useful as an early warning signal, not as an indication of an imminent reversal.

(VRT) Volatility Regime Transition

Volatility Regime Transition (VRT) classifies the market into three volatility regimes: contracted, neutral, and expanded. A regime transition signals that the market is shifting from one state to another. The most significant transitions are from contracted to expanded (a breakout in preparation) and from expanded to contracted (normalization after a sharp move). It does not indicate the direction of the move, but it changes the risk context: after a transition toward expansion, it is appropriate to expect larger-than-normal price swings.

(PL) Limit Pressure — Extreme Compression or Expansion

When the level of volatility expansion reaches historical percentile extremes — either very high or very low relative to the asset’s history — PL is triggered. Extreme compression (historically low volatility) often precedes strong directional moves, although it does not determine their direction. Extreme expansion, on the other hand, indicates that the market is already in a high-stress state, where sharp moves are already underway. In both cases, the signal suggests reviewing position sizing.

(CC) Countercurrent — Internal Pressure Against the Trend

The Countercurrent (CC) indicator measures not only the magnitude of price movements but also their direction. When CC is active, volatility is expanding in the opposite direction of the dominant trend: downside bars become wider during an uptrend, or vice versa. It is an indicator of accumulated pressure that anticipates possible breaks or corrections, especially when it appears persistently over several consecutive sessions.

How KBMeter Scores Interpret These Signals

The four VBTA indicators do not generate binary buy/sell signals.

Instead, they contribute to the VBTA section of the overall score: favorable signals (e.g., expansion aligned with the trend, stable regime) increase the score, while adverse signals (e.g., divergence from the trend, persistent CC) reduce it.

The weight of the VBTA section in the final score is 20%.

How to Use This Data

✅ Do

1. Always look at multiple indicators together – A single score doesn’t tell the whole story
2. Compare Health and Future – The divergence is often the most important signal
3. Consider the Regime – In Turbulence all signals are less reliable
4. Use percentiles for context – A Health of 60 can be great or average, depending on history
5. Read our disclaimer

❌ Don’t

1. Don’t base decisions on a single indicator
2. Don’t ignore Exhaustion – It’s an important warning signal
3. Don’t confuse neutral with negative – A score of 50 is not a problem
4. Don’t expect absolute precision – These are probabilities, not certainties

Quick Reference

Have more questions? Contact us or check our weekly analyses to see these concepts applied to real cases.