Sector Rotation Matrix

The keystone — the business-cycle phase (from pillar 02, with a liquidity override) selects a row of sector over- and underweights. The pills show the four phases; the active one is today's row.

Recoveryearly

Expansionmid

Slowdownlate

Contractionrecession

▸ How the row is chosen

The growth regime sets the base row. Liquidity can override: a Risk-Off liquidity regime pulls the matrix one phase more defensive regardless of growth. Margin profile and FX vector then tilt individual sectors within the row (a commodity tailwind lifts Energy/Materials; margin squeeze fades cost-takers).

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Current readings

Effective Row

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growth phase

Overweights

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Underweights

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Synthesis · the regime → sector matrix

11 Sectors × 4 Cycle Phases

Each cell is the matrix stance for that sector in that phase — green overweight, red underweight, grey neutral. The highlighted column is today's active row.

Today's sector stances — the matrix row scored and tilted by the margin and FX inputs, then ranked. The pills read the portfolio's overall tilt.

Cyclical-ledearly/mid

Balancedtransition

Defensive-ledlate/recession

▸ Scoring & method

Each sector starts at its matrix stance (+1 overweight, −1 underweight) and is tilted by the cross-pillar signals: a commodity tailwind adds to Energy/Materials, a margin squeeze subtracts from cost-takers. Score ≥ +1 → overweight, ≤ −1 → underweight, else neutral.

Current readings

Top Overweight

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Top Underweight

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Confirmed by RS

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stance & price agree

Components · inputs

Matrix Score by Sector

Conviction per sector — green overweight, red underweight. Ranked top to bottom.

13-Week Return by Sector

Recent price action — what the market has actually done over the last quarter.

Synthesis · ranked allocation

Sector Allocation Table

The full ranked stance, with 13-week return, relative strength vs the S&P 500, and whether price action confirms the matrix call.

Does the market agree? Each matrix call is cross-checked against 13-week relative strength versus the S&P 500. The pills read how well price action confirms the regime read.

ConfirmedOW leading

Mixedpartial

DivergentOW lagging

▸ Confirmation method

Relative strength = a sector's 13-week return minus the S&P 500's. An overweight call is confirmed when its RS is positive (leading); an underweight is confirmed when its RS is negative (lagging). When the defensives the matrix favours are lagging while cyclicals lead, the regime read and the tape diverge — a signal to size positions cautiously.

Current readings

Overweights Confirmed

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RS > 0

Underweights Confirmed

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RS < 0

Strongest RS

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Components · inputs

13-Week Relative Strength by Sector

Sector return minus S&P 500 return. Green = leading the market, red = lagging.

Relative Strength — Trend

Rolling 13-week RS over time for the leading and lagging sectors. Above zero = beating the index.

Synthesis · conviction vs the tape

Matrix Score vs Relative Strength

Each sector by its matrix score (x, conviction) and 13-week RS (y, momentum). Top-right = overweight & leading (confirmed); bottom-right = overweight but lagging (divergent). The quadrant lines are zero.

The price action behind the rotation — how the matrix's overweight and underweight baskets have actually performed against the S&P 500. The pills read where market leadership sits.

Defensive-ledrisk-off tape

Broadno leadership

Growth-ledrisk-on tape

▸ Method

The overweight and underweight baskets are equal-weighted from today's matrix stances and indexed to 100. Leadership compares the recent return of growth/cyclical sectors (Tech, Discretionary, Industrials, Comms, Financials) against defensives (Staples, Utilities, Health Care, Real Estate). A growth-led tape running against a late-cycle defensive matrix is the current tension.

Current readings

Best 13-Week

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Worst 13-Week

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S&P 500 13-Week

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benchmark

Components · inputs

OW vs UW Basket vs S&P 500

Equal-weighted overweight and underweight baskets against the index, indexed to 100. If the matrix is working, OW (green) beats UW (red).

13-Week Return by Sector

Recent leadership across the 11 sectors, ranked.

Synthesis · performance vs the S&P 500

Sector Performance Relative to the S&P 500 (1y)

Each sector divided by the index and re-based to 100 one year ago. Rising = beating the market; falling = lagging.