AI & Mathematical Methodology

Published: July 2026 | Sentinel Framework Whitepaper

⚠️ METHODOLOGY & NO-ADVICE NOTICEThis document outlines the mathematical framework and AI model architecture powering the Sentinel Market Intelligence Engine. Formulas and scoring models described herein are analytical tools and do not constitute financial advice or trade guarantees.

Sentinel bridges the gap between unstructured news flow and quantitative market execution by coordinating top-down macroeconomic surprise scalars with bottom-up NLP sentiment analysis.

1. Macro Surprise Scalar (St)

Macroeconomic surprises are normalized into standardized scalars measuring deviations from consensus expectations relative to historical standard deviations.

Formula: S_t = w_static * |(Actual_t - Consensus_t) / sigma_historical|
Static Event Weight (w): Red = 1.0, Orange = 0.5, Yellow = 0.2.
Rolling Volatility (sigma): Standard deviation of release surprises over historical 5-year rolling windows.

2. Shock-Adjusted & Confidence-Weighted Sentiment

Combines raw confidence-weighted sentiment scores (s_i in [-1, 1], c_i in [0, 1]) with asset-specific macro beta coefficients (beta_j).

Formula: Effective Sentiment_{j,t} = S_{raw, j, t} * (1 + beta_j * S_t)
S_raw: Weighted average compound score generated by fine-tuned Llama-3-Finance models.
Beta Sensitivity: Asset-specific exposure to macroeconomic release categories.

3. The CARE Prompting Standard & Intent Governance

To guarantee deterministic output, Sentinel enforces the CARE framework (Context, Ask, Rules, Examples). All LLM inference agents must output JSON populated with a mandatory 'reasoning_summary' key before generating numerical scores.

All calculations are validated by the IntentCore Compliance Gateway enforcing a strict 15% portfolio drift limit.

Multi-Agent Governance Architecture

1. Chief Macro Economist

Ingests economic releases and computes normalized macro shock tensors (St).

2. Senior Sentiment Analyst

Aggregates news headline sentiment, corporate QA tension, and 10-K textual inertia.

3. IntentCore Compliance

Stateless gateway node enforcing a strict 15% turnover circuit breaker limit.