Market Cycle Analysis
This dashboard tracks the Relative Strength (RS) of each sector versus the S&P 500 (SPY). Sectors rotate clockwise through four phases: Improving → Leading → Weakening → Lagging.
LEADING
Strong Trend + Outperforming
XLK
Technology
Top Pick
3M: +3.32%
1M: +3.87%
$154.35
+1.53%
WEAKENING
Outperforming but Losing Momentum
XLE
Energy
3M: +12.7%
1M: -14.94%
$55.02
-2.76%
XLB
Materials
Top Pick
3M: +3.9%
1M: +1.04%
$51.88
+0.25%
XLU
Utilities
3M: +3.71%
1M: -8.45%
$46.16
-0.41%
XLRE
Real Estate
3M: +2.71%
1M: -1.52%
$44.48
+1.53%
XLI
Industrials
3M: +1.29%
1M: -1.87%
$173.51
+1.87%
XLC
Comm. Services
3M: +0.74%
1M: -2.36%
$119.1
+0.23%
IMPROVING
Underperforming but Gaining Momentum
XLY
Discretionary
Top Pick
3M: -4.22%
1M: +2.13%
$120.41
+2.36%
LAGGING
Underperforming & Weak Trend
XLP
Staples
3M: -2.25%
1M: -7.03%
$82.46
+1.26%
XLF
Financials
3M: -6.36%
1M: -0.61%
$52.43
+0.77%
XLV
Healthcare
3M: -7.13%
1M: -6.14%
$148.8
+1.49%
Strategy Transparency
Methodology
This dashboard implements a Relative Rotation Graph (RRG) methodology. It plots sectors based on their relative strength (RS) versus the market benchmark (SPY).
- Leading Strong uptrend & outperforming SPY. The ideal place for long positions.
- Weakening Still outperforming, but momentum is fading. Often a signal to take profits.
- Lagging Weak trend & underperforming. Avoid these sectors.
- Improving Momentum is picking up, although still negative vs SPY. Good for "bottom fishing".
Strengths & Weaknesses
Why it
works
- Defensive: Naturally rotates out of crashing sectors (like Tech in '22).
- Tactical Alpha: The 1M Signal (Top Pick) historically outperforms SPY by reacting faster to new trends.
Risks
- Bull Market Drag: In a strong "everything rally", rotation strategies often lag buy-and-hold.
- Whipsaw: False breakouts in "Improving" sectors can lead to losses if the trend fails.