What it measures
The Discourse Index condenses every signal the Palanor Discourse engine produces into one read. It blends the average sentiment of the most-recent quarterly earnings call across the scored universe (weight 40%), the average confidence in management language (weight 20%), the count ratio of bullish entities to bearish entities (weight 20%), and the aggregate revenue-guidance revision pressure across the corpus (weight 20%). All four feed a single 0–100 sigmoid where 50 is the long-run neutral state. The number answers a question every steward asks at the start of earnings season: where is the room sitting right now?
Why these components
Sentiment alone is too thin — markets move on a confident bull and a hesitant bull differently. So we weight confidence in. Two firms reporting at 0.7 sentiment with 0.85 confidence is a different reality than two firms at 0.7 sentiment with 0.55 confidence. The bull-bear ratio captures distribution rather than mean — a 0.6 average with 90% of firms above 0.65 is a different signal than 0.6 with 30% above. And revision pressure (the sum of revenue_guidance_pp) catches what management is actually changing forward, not just how they sound talking about the trailing quarter.
How to read it
Above 65 — the room is collectively bullish, confident, and revising upward. This is the late-cycle expansion state. Between 45 and 65 — mixed signals, transitional, or split by sector. Below 45 — pessimistic with low confidence and downward revisions; the recession-onset signature. The index updates daily at 09:30 UTC, but the underlying transcripts only refresh quarterly, so day-to-day movement reflects new transcripts arriving during the earnings-season window rather than the same data being rescored.
What it does not say
The Discourse Index is a public-corpus consensus read, not a prediction. Companies often sound confident going into a downturn (the surprise is what makes it a downturn). The index is most useful as a regime indicator paired with prediction-market readings and signal-watch data — when The Discourse Index is high but signal data is rolling over, that's the disconnect that signals the regime shift before earnings-call language catches up.