MSE-based SPY Market Report - Feb to 1 May 2025
SPY Market Turning Point Analysis (Feb – 1 May 2025)
Using the Modified Schrödinger Equation (MSE) Framework
Introduction
The SPY ETF — a proxy for the S&P 500 — has experienced turbulent price action over the past quarter amid macroeconomic uncertainty and shifting investor sentiment. To assess whether the market is rebounding, stalling, or collapsing, we turn to a rigorous quantitative toolset: the Modified Schrödinger Equation (MSE) Market Collapse Model.
This model, inspired by quantum physics, evaluates price momentum, curvature, volume dynamics, and crowd behavior through seven distinct indices:
ΔlogP(t): Price momentum
Ψₚ′(t): Price slope
Ψₚ″(t): Price curvature
ACI(t): Attention Collapse Index
CCI(t): Cumulative Collapse Index
AAI(t): Absolute Attention Index
PII(t): Phase Interference Index
The results below offer not only technical confirmation of a possible bottoming and reversal in SPY, but also insights into market psychology and investor alignment.
MSE Indices Visuals
Each subplot tracks one of the MSE indices from Feb to 1 May 2025.
Interpretive Summary Table (1 May 2025)
Index Value Threshold Explanation Status
Ψₚ′ (Slope) +0.0158 > +0.002 = Bottom turning up ✅ OK
Ψₚ″ (Curvature) +0.0154 = Flat or rising U-turn forming cleanly ✅ OK
ACI −0.2905 = Should rise toward +0.10 Emotionally calm ⚠️
Below AAI −0.0239 = Acceptable Controlled energy return ✅ OK
CCI +0.0154 > +0.0015 = Some reinforcement starting ✅ OK
PII +0.92 > +0.85 = Strong phase coherence ✅ OK
Interpretation
Momentum and Curvature Confirm Rebound
Ψₚ′(t) and Ψₚ″(t) both turned sharply positive in late April, confirming an upward inflection point.
These metrics suggest that the market has found footing and is attempting to climb out of prior selling pressure.
Calm Crowd, Low Panic
ACI remains negative, indicating the rally is not driven by crowd euphoria or unsustainable panic buying.
This supports a healthier foundation for potential continuation.
Volume Alignment (PII)
With PII at +0.92, there is strong coherence between price movement and volume, a hallmark of institutional alignment or coordinated interest.
Conclusion
(1) SPY is showing strong signs of an upward turn, both technically and behaviorally.
(2) HOWEVER, The lack of emotional overdrive (low ACI) combined with synchronized volume flow (high PII) points to a resilient but still cautious recovery.
The market appears to be in motion, not overheating — a potentially ideal state for rebuilding positions.
Recommended Actions
Initiate Scaling Entries – Traders and allocators may consider phased re-entry into SPY or correlated equities.
Monitor ACI Closely – A sudden rise in ACI could imply emotional overheating. Use as an early exit warning.
Track PII – Sustained PII > 0.85 supports continuation. A drop < 0.5 could warn of weakening follow-through.
Hedge Selectively – Given modest crowd energy, hedges can remain light unless curvature rolls over again.
Reassess DAILY – Continue reviewing MSE indices weekly for trend confirmation or divergence.