How Reliable Is Backwardation as a Standalone Indicator for Market Timing?

Backwardation is not a reliable standalone indicator for market timing. While it has historically coincided with some market bottoms, it is a rare event and can also be a false signal.

Relying solely on backwardation to time the market is risky because it is a lagging indicator of extreme fear, and the market can remain in a downtrend for an extended period even after backwardation appears. It is most effective when used in conjunction with other technical and fundamental analysis tools to build a more comprehensive market outlook.