📘 STRATEGY PLAYBOOK: MOMENTUM + PE GOVERNOR
Dual-Engine Logic
The system uses the 50DMA Momentum Engine as the primary driver, but applies a strict "PE Governor" layer to prevent overheating.
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1. The Engine (50 DMA): Detects daily market mood (Heated vs Value).
This allows us to buy dips even in a bull market.
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2. The Governor (PE Ratio): Sets hard ceilings and floors.
Overrides the engine if valuations get extreme.
⚡ The PE Governor Rules
| PE Zone |
Governor Action |
| PE > 27 (Bubble) |
HARD CAP: 0.5x
Defensive Mode |
| PE 24.5 - 27 (Expensive) |
CEILING: 0.8x
Force lower allocation |
| PE 20 - 24.5 (Fair) |
NO OVERRIDE
Trust Momentum Engine |
| PE < 20 (Cheap) |
FLOOR: 1.2x
Force Aggressive Buy |
Zone
Trigger Condition
Mult
Strategic Action
⚠️ KNIFE
< 200DMA x 3 Months
0.4x
Structural Bear. Trend is broken. Hoard cash and wait for stability.
EUPHORIA
Price > 8% above 50 DMA
0.6x
Profit Taking. Markets are overheated. Invest minimum, save 40% to War Chest.
HEATED
4% to 8% > 50 DMA
0.8x
Caution. Momentum is high but risk is rising. Reduce allocation slightly.
NORMAL
-3% to +4% of 50 DMA
1.0x
Business as Usual. Fair value zone. Deploy standard SIP amount.
VALUE
-3% to -8% below 50 DMA
1.2x
Buy the Dip. Asset is cheaper than recent average. Deploy accumulated savings.
CORRECTION
< -8% 50DMA & DD > 10%
1.4x
Aggressive Accumulation. Significant market correction. Increase deployment heavy.
BEAR MKT
DD > 18% & Price < 200DMA
1.6x
Support Test. Institutional floor likely. High bounce probability.
CRASH
DD > 30% & Price < 200DMA
1.8x
Black Swan Event. Panic in streets. Deploy MAX reserves. Avoid bankruptcy.