A backtested risk-on/risk-off strategy that switches to short-term bonds in a crash, uses levered stock ETFs in calm markets, and adds rate-aware hedges (USD, SDS/TBF) to handle rising rates; includes a refined fall-rate option (SSO/TMF) with drawdown controls and a 0.15 rebalance rule, avoiding K-1 ETFs.

- The system watches market stress using a volatility signal based on the VIX index. If the volatility signal is high enough (a 40-day RSI of VIX-related data above 69), the strategy treats the market as in a crash and shifts to risk-off, placing capital in short-term bonds (SHY). - If there isn’t a crash signal, the strategy moves to a Normal Market state (risk-on). It selects a subset of leveraged equity ETFs (examples include QLD, SSO, ROM, USD, and a Dow-focused levered ETF) that have shown stronger short-term momentum, and allocates a substantial portion of capital to the top 3 among them (weighted toward those with stronger relative performance) to capture upside in a calm market. - The regime also considers the broader rate environment. In rising-rate scenarios, the plan uses USD-strength and hedges like SDS (2x inverse S&P 500) and TBF (short 20+ year Treasuries) as part of a risk-off sub-strategy; in falling-rate scenarios, a refined risk-on approach can come back, including a dedicated HFEA sub-strategy that combines SSO (levered equity) with TMF (3x long Treasuries) to exploit favorable price movement in a low-rate or falling-rate backdrop, with rules to limit drawdowns. - A separate “Rising Rates” branch uses cash-like and hedged assets (USDU, SDS, TBF) to protect against equity losses when rates rise and USD strength helps. - A “Falling Rates” branch (HFEA Refined) actively weights a small set of levered equity and bond exposures (SSO and TMF) with strict risk gates (moving-average price checks, max-drawdown limits) to balance growth with downside protection. - Throughout, the design avoids ETFs that issue K-1 forms and employs a modest turnover rule (rebalance corridor) to avoid excessive trading. The overall goal is a two-tier approach: take on leverage and equity exposure in favorable, low-volatility regimes, but retreat to safer, rate-aligned hedges when volatility or rate signals deteriorate, aiming for a smoother equity-like upside with lower drawdowns over the long run.

Out-of-sample: 23.64% annualized return vs SPY 22.26%. Dynamic risk-on/off with rate-aware hedges targets higher upside and better risk management; Calmar ~0.56. Note: drawdowns can be larger in stress periods.