Sector Analysis Tool

Sector Rotation Scorecard

Score all 11 GICS sectors. Get overweight and underweight recommendations.

Enter 5 macro cycle signals and each sector's trailing relative strength percentile. The scorecard combines both inputs to rank all 11 GICS sectors and recommend overweight, market-weight, and underweight designations for a top-down allocation overlay.

Step 1 — Economic Cycle Signals

Current readings of key macro indicators. These determine which sector characteristics the cycle currently favors.

Step 2 — Sector Relative Strength Percentile

For each sector, enter its current trailing 26-week RS percentile rank versus all 11 sectors (0 = worst, 100 = best). If you track the ratio (e.g. XLK/SPY), translate by ranking from weakest to strongest across all 11.

Scorecard Results

Allocation Summary

Rank Sector RS Score (40%) Macro Score (60%) Composite Signal

How scores are calculated: Composite score = 60% macro score + 40% RS percentile (normalized 0–10). Macro score reflects which sector characteristics the current cycle environment favors — e.g., early cycle/steep curve boosts Financials and Consumer Discretionary; late cycle boosts Energy; recession/deep contraction boosts Health Care, Utilities, Consumer Staples. Top 3 composite scores = Overweight; bottom 3 = Underweight; middle 5 = Market Weight. This tool provides a structured starting framework, not investment advice. Validate outputs against your own research before making any allocation decisions.

How to Use This Tool

  1. Set macro signals (Step 1): Select the current reading for each of the five economic cycle indicators. ISM PMI and yield curve carry the most weight in determining cycle phase; credit spreads and inflation trend provide additional signal.
  2. Enter RS percentiles (Step 2): Calculate the 26-week ratio of each sector ETF to SPY, then rank all 11 sectors from weakest to strongest. Convert to percentile: the lowest-RS sector gets 0, the highest gets 100. Intermediate sectors get evenly spaced percentiles. Enter these values in the grid.
  3. Compute the scorecard: Click "Compute scorecard" to see each sector's composite score, ranking, and overweight/underweight designation.
  4. Apply as an overlay: Use the output to tilt sector allocations by 5–10% above benchmark weight for overweights and 3–5% below for underweights. The remaining sectors hold at market weight.
  5. Review monthly: Recalculate when macro indicator readings change materially or when RS rankings shift. The output should change the allocation only when signals are consistent across multiple indicators, not on single-period noise.