The Heatmap and the 9-Box
The whole index on one screen, sized by weight and coloured by move. It answers breadth questions faster than any list can.
MadStockAlerts Research · Updated August 28, 2026
What to take away
- Tile size is index weight; colour is the move over the selected window.
- The window control changes the question entirely, from one day to one year.
- S&P 500, Nasdaq 100 and Dow 30 each answer a different breadth question.
- Shape reading comes first: columns, rows and diagonals each mean something.
- It shows what is moving the index, not simply what is moving.
- A capitalisation-weighted map can be green above a market where most securities fell.
MAD Academy Training Video · 0:45
Two Dimensions in One Box
The heatmap encodes size and move together, and the 9-box splits the market into a grid you can read at a glance.
This lesson is part of a Stock Alerts + Tools plan.
What is being encoded
Each tile is a company. Its size is its weight in the index, so the largest companies occupy the most space, and its colour is its move over the selected window. Tiles are grouped by sector.
Because size is index weight rather than an equal split, the map shows what is moving the index rather than what is moving. A screen of red with two enormous green tiles is an index that rose on a day when most of its members fell, which no list of percentage changes communicates as quickly.
That distinction is the whole reason to use a heatmap rather than a sorted table. A table answers what moved most; the heatmap answers what mattered.
The shapes
| Shape | Reading |
|---|---|
| A green column | One sector moving together, which points at a sector-level cause |
| A green row | A size band moving together, which points at a factor rather than a sector |
| A diagonal | A rotation: money moving between groups rather than into or out of the market |
| Everything one colour | A macro move; the cause is not in any individual company |
The last row is the one that saves the most time. When the whole map is one colour there is no point reading individual names, because nothing about any of them explains the day.
The window is the question
- 11DToday's action. Dominated by news and by the day's macro release.
- 21W and 1MWhether a move persisted beyond the day that produced it.
- 33M and 6MThe intermediate trend, where rotation becomes visible.
- 41YThe prevailing regime, which a daily view says nothing about.
Comparing a single day against a longer window is what separates a one-day reaction from a trend. A sector that is red today and deeply green over three months is in a pullback within an advance, which is a different situation from one that is red on both.
Changing the index
Each index asks something different. The S&P 500 is the broad market. The Nasdaq 100 is concentrated in large technology and is far more sensitive to rates. The Dow 30 is price-weighted, which means a high-priced constituent moves it more than a larger company with a lower share price.
The Dow's weighting is worth remembering because it is genuinely unusual. It is the one major index where a stock split changes a company's influence on the index without changing anything about the company.
Where a heatmap misleads
The encoding is efficient and it has a small number of well-defined failure modes, all of which follow from what a fixed layout of coloured rectangles can and cannot show.
| What can mislead | Why |
|---|---|
| A colour scale with no fixed range | A quiet day looks dramatic if the scale rescales to the day's own extremes |
| Size by market capitalisation | A handful of very large constituents dominate the picture regardless of breadth |
| A one-day window | One session is noise for most securities, whatever the colours suggest |
| Sector blocks of unequal size | A small sector moving sharply is visually easy to miss |
| Percentage change alone | A five percent move means different things at different volatilities |
The second row is the most consequential in a capitalisation-weighted view. A map that is mostly green because the largest constituents rose can sit above a market where most securities fell, which is a different session from the one the picture describes.
This is why the heatmap and a breadth reading answer different questions, and why the honest use of the map is as a fast survey of where attention should go rather than as a summary of the day.
Reading a session quickly
The map earns its place as a first look, and a consistent order makes that look worth taking. The order below moves from the general to the specific and takes well under a minute.
- 1The overall tintBroadly green, broadly red, or genuinely mixed. Mixed is the most informative of the three and the least reported.
- 2Whether the sectors agreeEvery sector moving together says the move is about the market. A split says it is about something specific.
- 3The outliers within a sectorOne rectangle a different colour from its neighbours is a company-level event, and it is the fastest way to find one.
- 4The size of the moversWhether the colour is concentrated in the large rectangles or spread across the small ones, which is a breadth question.
- 5Change the windowThe same map over a week or a month usually tells a different story from the day, and the difference between them is the finding.
The last step is the one most often skipped. A single day's map is dominated by noise, and the same layout over a longer window is where rotation becomes visible.