What breadth adds

Rather than only ranking assets by how strongly they’re rising, each strategy also counts how many assets in its universe show positive momentum at all — a measure of the market’s overall health, not just one holding’s fortunes. This count is what the strategies call breadth.

When breadth falls, that’s read as a broad loss of appetite for risk, and the strategy rotates the portfolio out of stocks and into bonds or cash until conditions improve. The count does the deciding, not anyone’s judgement about whether this particular wobble is serious.

A few of these strategies — DAA, BAA, HAA — apply that same breadth count to a small early-warning basket of just two or three assets, what the papers call a canary universe. Each asset in it acts as a canary, named for the caged birds coal miners once carried underground: if a canary faltered, the miners left immediately, without waiting to see whether the rest of the mine felt fine. These strategies work the same way — when the canary universe’s breadth turns down, the strategy retreats immediately, regardless of how the broader universe scores.

The canary basket is watched, never bought. That is why the comparison on the home page counts fewer funds than you might expect for those strategies: you need a price feed for the canaries, not a position in them.

This is where the strategies separate from one another. How many bad assets it takes before the rule starts selling, and whether it sells all at once or in steps, is most of what makes one of these more cautious than another.