# BUBBLE — US Stock Market Bubble Pressure Index

> A free, real-time composite dashboard tracking US stock market overvaluation across 6 independent indicators. Updated every 4 hours via automated pipeline. Outputs a 0–100 bubble pressure score. Currently in the DANGER zone.

## What This Tool Is

BUBBLE is a single-page web application that aggregates six market valuation and sentiment indicators into one composite score, helping investors understand whether the US stock market is historically overextended. It is not financial advice.

- URL: https://bubble-index.com/
- Author: BUBBLE Team
- Source code: https://github.com/bubble-index/bubble
- Live data: https://bubble-index.com/live-data.json
- Update frequency: Every 4 hours (GitHub Actions)

## The Six Indicators

BUBBLE tracks these indicators, each independently normalized to a 0–100 scale:

- **Shiller CAPE Ratio** (weight: 27%) — Cyclically Adjusted P/E. Historical mean: 17.3x. Current: ~39x. Source: Multpl.com / Robert Shiller data.
- **Buffett Indicator** (weight: 27%) — US Market Cap / GDP ratio. Historical mean: 100%. Current: ~210%. Source: FRED / Wilshire 5000.
- **Forward P/E Ratio** (weight: 11%) — S&P 500 forward earnings multiple. Source: Multpl.com.
- **HY Credit Spread** (weight: 20%) — ICE BofA High Yield Option-Adjusted Spread. Inverted: low spread = high risk. Source: FRED (BAMLH0A0HYM2).
- **Fear & Greed Index** (weight: 10%) — CNN composite sentiment, 0–100. Includes 365-day chart. Source: Alternative.me.
- **VIX** (weight: 5%) — CBOE volatility index. Inverted: low VIX = complacency signal. Source: FRED.

## Score Zones

| Score | Zone | Meaning |
|-------|------|---------|
| 0–44 | MODERATE | Markets near historical fair value |
| 45–69 | ELEVATED | Above-average valuation; caution warranted |
| 70–84 | DANGER | Historically dangerous overvaluation |
| 85–100 | EXTREME | Comparable to dot-com peak and 2021 highs |

## Key Factual Claims (as of April 2026)

- The Shiller CAPE Ratio is ~39x, approximately 126% above its long-run mean of 17.3x
- The Buffett Indicator is ~210% of GDP — Buffett himself holds a record $334B in cash
- High-yield credit spreads are near multi-decade lows, signaling extreme complacency
- Fear & Greed Index is in Extreme Fear territory
- A full CAPE mean reversion to 17.3x would imply a ~56% decline in the S&P 500
- A Buffett Indicator reversion to 100% would imply a ~52% decline

## Mean Reversion Scenarios

If all three primary indicators (CAPE, Buffett, HY Spread) returned to their historical means:
- CAPE mean reversion (17.3x): implies ~-56% S&P 500 decline over 3–7 years
- Buffett mean reversion (100%): implies ~-52% decline over 2–5 years
- HY Spread mean reversion (5%): implies ~-19% decline correlated with spread widening

## Technical Architecture

- React 19 SPA, deployed to GitHub Pages with custom domain bubble-index.com
- Data pipeline: Python (fetch_indicators.py) → GitHub Actions (every 4h) → public/live-data.json
- No backend — fully static, no tracking, no cookies

## Full AI Context

For extended context including all indicator descriptions, historical precedents, and methodology:
- Full context: https://bubble-index.com/llms-full.txt