New Settings Unlocked: The 8th Rule for U.S. Equities ($SPX)

I’ve been running The 8th Rule on Bitcoin since day one. It was built for Bitcoin. The volatility profile, the asymmetric exits, the dual-speed architecture.. all designed around an asset that moves 10-15% in a week and doesn’t apologize for it.

But I kept getting the same question: can it work on stocks?

The default Bitcoin parameters get shredded by SPX. Too fast. Too twitchy. Every normal 3-5% pullback triggers a bearish flip, you churn through trades, sell every bottom, and bleed out slowly while the S&P grinds higher without you.

I ran 35 years of price history (back to 1991) and the original settings produced a 4.5% CAGR with a 43% win rate. Not great.

The fix was exactly what you’d expect: slow everything down. Wider Gaussian filter. Longer HMA. A bear threshold that doesn’t panic on a garden-variety correction.

The optimized SPX settings turned 373% into 725% total return, pushed win rate from 43% to 57%, cut whipsaws in half, and dropped max drawdown from -19% to -15%. Profit factor went from 2.68 to 3.63. Every metric that matters moved in the right direction. Full V1 vs V2 comparison below.

I also ran an overlay analysis against my Macro Regime Engine to see if combining the two signals on U.S. equities produces anything useful. Short answer: it does.

The two systems agree 75% of the time, and when they both say bearish, equities average -7.5% annualized. When they both say bullish, +11.7%. The MRE remains the king of U.S. equity risk management (8.17% CAGR with a -5% max drawdown is hard to argue with), but The 8th Rule gives you a faster entry signal and works as a standalone trend scorer for names where you don’t have an MRE equivalent.

Full combination analysis below.

The optimized SPX settings are available now for paid subscribers. Screenshot below.. plug these into The 8th Rule on TradingView and apply to $SPX (or experiment with other large-cap names and ETFs).

If you’re not a paid sub yet, it’s $7/month. Cheaper than an Iced Ube Coconut Macchiato from Starbucks, and it won’t give you the jitters.

Text based settings for easy copy-paste:

// Optimal Settings for Symbol: SP:SPX
// HMA: 55
// Gaussian: 215
// Sigma: 12
// ATR: 24, 0.85, 27
// EMA Confluence: 65
// Regime Logic: 0.5, -5, 1
// VATS (Fast & Slow): 15, 92
// Bullish Trigger: 0.15

Please note: prior performance does not guarantee future results.

Hope this helps.. feel free to tweak it further for other mega-caps and let me know if you find better settings that have better backtest results!

The work never stops because markets never stop evolving.

— Durden out. ✊🧼