Overview
The Palanor Index is the flagship. It measures the gap between belief and uncertainty across forward-looking instruments — implied volatility, credit spreads, currency safe-haven flows, and gold. When the market believes and is calm about it, the index reads near zero. When the market does not believe and is not certain of its disbelief, the index climbs toward 100. The bands are wide; the regime moments are clearer than the daily readings.
Why these components
Implied equity volatility (VIX) is the most direct forward read on uncertainty. High-yield credit spreads carry the same signal expressed through the credit channel. The dollar index and gold capture safe-haven posture — when capital moves to perceived shelter, the index rises. CNN's Fear & Greed reading is included as the sentiment counterweight: when greed is high relative to the other components, belief outpaces uncertainty and the index falls.
Methodology
Each volatility and spread series is z-scored against its trailing 24-month distribution. Fear & Greed enters as a level recentered around 50 and sign-flipped. Gold uses a 12-month percentage change because the level series is non-stationary. The weighted sum is mapped through a logistic into 0–100. Five reading bands: 0–0.2 reckless confidence; 0.2–0.4 normal belief; 0.4–0.6 watchful; 0.6–0.8 fear; 0.8–1.0 capitulation. The bands are calibrated against the baseline window — not opinion.
Interpretation
The Palanor Index is meant to be carried into a meeting as a single sentence. Read it aloud: 'The Palanor Index is at 0.41 — markets believe but are not confident.' That sentence is a deliverable. The index is not a forecast. It is a snapshot of how much the world believes its own pricing.
Caveats
The composition is intentionally simple. Future versions will add prediction-market depth on named flashpoints (Kalshi, Polymarket) as a sixth component to capture forward belief on specific events, not just generalized uncertainty. The current composition is a v1 read; the methodology will evolve and you will see the version number change in the title block when it does.