Does daily return + RSI(13) summarise a category?
Short answer: RSI(13) is a good within-category gauge, but it is the wrong tool for the rotation decision. The board answers two different questions, and they need two different reads.
- Is a category overbought / exhausted (RSI>70) or washed out (RSI<30)?
- Is its own trend up or down (RSI above/below 50)?
- A clean single number per tile for a daily glance.
- In a bull market almost everything sits >50, so "others all >50" is nearly always true — it carries little information.
- Absolute RSI doesn't tell you which category to own — that's a cross-sectional question.
- RSI(13) on noisy daily data whipsaws; the rotation signal is weekly.
For "where do I rotate," use cross-sectional relative strength — rank the 8 categories against each other (by 13-week return or by RSI) — not each one's absolute RSI level. The signal is the leader, the laggard, and the spread between them, not whether a tile is above 50. In this sample the average category sat above RSI 50 about 74% of all weeks — proof the absolute level is a weak cross-sectional filter.
So read the board on three layers
Board shapes → cycle stage
The same patterns the live Rotation Monitor flags, as visual shapes and what each implies. This is the health/stage read — whether it's also a profitable trade is Part 2.
Does rotating actually pay? (2023→now)
Weekly rebalance, signal lagged 1 week (no lookahead). Equal-weight category indices. Established board only (recommended-adds excluded). Current-constituents -> mild survivorship bias. Costs: 5/10 bps per switch.
Who led, who lagged
Equal-weight category indices since 2023 (all rebased to 100). Leadership share = how often each category was the strongest by 13-week relative strength.
Forward return by relative-strength rank
The cleanest answer to "buy strength or buy weakness?" For every week, rank the 8 categories (1 = strongest by 13-week momentum, 8 = weakest), then measure each rank's average return over the next 4 weeks. If buying weakness pays, rank 8 should be tallest (reversion). If momentum persists, rank 1 is tallest.
Strategy results (net of 5bps/switch)
Weekly rebalance. Momentum = hold the strongest N; Reversion = hold the weakest N (the proposed idea); Buy-the-laggard = your exact rule (buy weakest, hold until it becomes strongest, rotate). Benchmarks: own all 8 equally, or buy-and-hold SOXX.
How to actually use the board
Is the stage a leading or lagging signal?
You asked the sharpest question in the whole project. The honest answer: the confirmed stage label is lagging by design — the regime engine uses hysteresis (it waits for confirmation) to avoid whipsaw, so it tells you where you were, not where you're going.
The leading content isn't the label — it's the components: the demand/cloud divergence, equipment/WFE orders rolling, memory pricing, and credit/MOVE. That's exactly why the Rotation Monitor surfaces divergences rather than just a verdict. Use the board as a risk-posture gauge; treat the divergence tells as the early read.
"Run the strategy once a stage is confirmed, hold until it flips" — that's the regime-conditional test below. Because you must wait for confirmation, you eat part of the move; the cross-era table quantifies exactly how much.
Momentum's win was the boom regime
Splitting 2023→now by an exogenous regime (SOXX above/below its 40-week average, lagged one week so you only act after it's confirmed) and re-running each strategy within each regime. Your suspicion was right.
So the ranking flips: momentum dominates risk-on and falls to the bottom in risk-off, where buying weakness / owning the board win. The synthesis is a regime switch — momentum when the trend is up, defensive when it isn't:
Eight bubbles, one shape
How a 40-week trend-follow (momentum-with-an-exit) behaved vs buy & hold around each historical peak. Index level, free data — sector/basket depth needs the TradeStation export.
The six stages every bubble repeats
Across railways 1840s, 1929, Nifty-Fifty, Japan 1989, dotcom, housing, crypto, and SPAC — the same arc, and a different dominant strategy in each stage.
The top-tells that say "momentum is now too late"
These lead the label. When this cluster lights up, stop adding and rotate up the quality curve.
Which stage is AI in now — and the hand-off rule
The Warsh pivot: higher-for-longer as a framework
Has the Fed done this to a frothy market before?
Seven past Fed regime-changes, scored for closeness to Warsh-2026 across six dimensions (new hawkish chair, framework/communication overhaul, balance-sheet/QT, higher-for-longer, frothy tech market, productivity-raises-r*). No single one matches all six — each rhymes on a different dimension.