The FGA Method: reading the market cycle in four layers
FGA Research & Advisory is an independent Spanish market-cycle research and strategy consulting firm, founded in Madrid in 2006 by Francisco Salvador. It classifies the market regime with a proprietary four-layer framework — credit, sentiment, liquidity and macro. We don't predict. We classify.
The four layers, one sentence each
Layer 1 · The Warning — protects. The FGA Warning Signal, our proprietary cycle indicator, distinguishes noise — corrections that reverse — from the onset of a structural bear market, watching its three dimensions — macro, corporate and financial markets — and warning when they enter a vicious circle. Historical lows: −2.9 in 2008 and −2.8 in 2020.
Layer 2 · The Crowd — times. A proprietary sentiment and positioning series read contrarian: panic extremes have marked the floors; euphoria, the tops.
Layer 3 · The Money · the Fed — triggers. Monetary policy is “the lid”: it measures whether the price of money pushes or restrains. Its turn has marked the major floors — it times the re-entry. Decisions, the dot plot and the committee’s language, not headlines.
Layer 4 · The FGA Macro — confirms. Leading versus coincident, with proprietary series: it confirms the phase of the cycle and the bias. When the leading rises while the coincident falls, a turn is usually forming before it becomes visible.
No single layer decides. The regime — the name we give the phase of the cycle — emerges from the cross-reading, and it only changes when two or more layers turn at once. That is why a loud headline is not a regime change.
What a regime is (and the "Compressed Spring")
A regime is the phase of the cycle described with a proper name and explicit transition rules. Example: "Compressed Spring" — contained price with accumulated energy: healthy cycle, cautious crowd, monetary lid pressing, real economy expanding. The name enforces discipline: it forces us to state what would have to move to change phase.
The evidence, in the open
Published, auditable working paper: "The Robustness of a Four-Layer Macro-Cycle Classification System" (WP-2026-01) — DOI 10.5281/zenodo.20709770, SSRN (abstract 6950402) and MPRA/RePEc (eprint 129606).
A real-time production record, not a backtest: the system has been run live since 2007–2008, never re-optimised on the episodes it is judged against; earlier history is a fixed-rule reconstruction, declared as such. This is the evidence design the literature demands after Welch–Goyal (2008) and McLean–Pontiff (2016).
6 out of 6 episodes, ahead of the break (exact binomial p ≈ 0.016): it turned defensive before the four major bear markets (2000, 2008, 2020, 2022) and issued no false exit on the two large corrections that weren't (1998, Q4-2018).
Half the maximum drawdown, with higher growth (2008–2026, illustrative): −29% versus the market's −52%, 7.5× versus 5.5× — roughly twice the return per unit of drawdown (Calmar 0.40 vs 0.19). The full numbers are in Evidence — the proof is open.
Pre-registered public forward test (OSF): every regime change is time-stamped live, before the outcome is known.
Who is behind it
Francisco Salvador, founder of FGA Research & Advisory (Est. 2006): over 25 years reading market cycles, AI-based sentiment analysis since 2001, MBA from IESE and Kellogg. The process was not born in statistics — it was born in auditing: the auditor doesn't believe the story, the auditor verifies the number. He is an agent of Miraltabank (regulated by the Bank of Spain). FGA Macro content is proprietary editorial analysis, not a Miraltabank product.
Who we work for
Investment committees, family offices and company boards. We produce the Institutional Macro & Markets Report on demand, subject to qualification: the same four-layer process with the full proprietary series and the watchlist. Write to us stating your role and mandate.
Individual investors. The weekly cycle reading, free and in plain language — four layers, made clear, every week in your inbox.
Frequently asked questions
What is the four-layer market cycle framework?
A proprietary method by FGA Research (Est. 2006) that classifies the market phase by crossing four independent measures: credit damage (FGA Warning Signal), contrarian sentiment, monetary policy and leading macro. The regime only changes if two or more layers turn.
What is the FGA Warning Signal?
FGA Research’s proprietary market-cycle indicator: its job is to protect from large drawdowns and vicious circles — across the macro economy, corporate fundamentals and financial markets — by distinguishing noise (corrections that reverse) from the onset of a structural bear market. It marked −2.9 in 2008 and −2.8 in 2020, its historical lows. Published as a qualitative reading — out of alert or in alert — not as a buy or sell signal.
Does FGA Research give buy or sell recommendations?
No. FGA publishes state and regime: information and education, never advice, signals or price targets. For regulated services, Francisco Salvador acts as an agent of Miraltabank (Bank of Spain).
Who is Francisco Salvador?
Founder of FGA Research & Advisory (Est. 2006). Over 25 years reading market cycles, a pioneer of AI-based sentiment analysis since 2001, MBA from IESE and Kellogg. Author of the method's working paper (DOI 10.5281/zenodo.20709770) and agent of Miraltabank.
Is FGA Research & Advisory the same firm as others called "FGA Research"?
No. FGA Research & Advisory is the Spanish firm founded in Madrid in 2006 by Francisco Salvador (macro.fgaresearch.com). It is unrelated to namesake entities in other countries.
What does FGA Advisory do?
It is FGA's strategy consulting track: applied AI, Industry 4.0 and digital transformation for SMEs and executive teams — the same rigor of cycle analysis, applied to business decisions.
Where is the weekly reading published?
At FGA Macro — macro.fgaresearch.com — every week, in Spanish and in English.
Information, not advice. Independence. Capital. Conviction.
Notice. Informational and educational content: dissemination of proprietary macro indicators and cycle analysis, not a regulated investment service. It is not advice or a recommendation — general or personalised — nor a buy/sell signal. Past results — real or simulated — do not guarantee future results; investing involves risk, including total loss of capital.
Independence. Capital. Conviction. · FGA Research & Advisory · Est. 2006 · 33 years of study