overview
The Strategy
Momentum rotation is built on a well-documented phenomenon in financial markets: assets that have recently outperformed tend to continue outperforming over the next 1–12 months. This effect has been observed across equities, commodities, currencies, and fixed income for decades.
Instead of picking individual stocks bottom-up, the strategy first identifies which market segment has the strongest trend, then drills down to find the best stocks within that segment. This top-down filtering dramatically reduces the universe and focuses capital on the highest-probability opportunities.
The result is a concentrated portfolio of 1–2 positions, rebalanced weekly (Balanced) or monthly (Growth), that systematically rotates toward market strength.
The strategy has been backtested over 19 years (2006–2025), delivering 47.72% CAGR (Balanced) vs SPY's 10.80% over the same period.
universe
Universe Classification
The investable universe spans 19 themes: 17 sector and commodity ETFs plus direct BTC and ETH. The EMA 10/100 daily trend filter ensures we only allocate to themes in genuine uptrends.
US Equities (11)
Commodities & Alternatives (7)
The universe is refreshed monthly. Stocks that have been acquired, delisted, suspended, or lost liquidity are automatically replaced with active alternatives. You can explore each theme's full constituent list on the Rankings page.
selection
Selection Process
Rank all 19 themes by momentum
On each rebalance the system calculates price momentum for all 19 themes (17 ETFs + BTC + ETH) — 16 weeks for Balanced mode, 26 weeks for Growth mode. An EMA 10/100 daily trend filter then screens for confirmed uptrends. These are sorted highest to lowest — the leaderboard you see in the Rankings tab.
Select the top 1–2 themes
The top-ranked theme(s) with positive momentum become the active investment themes. If no themes pass the EMA 10/100 uptrend filter, the strategy holds cash instead of forcing a trade.
Allocate to ETF or direct crypto
Each winning theme is held via its ETF directly (e.g. XLK for Technology, GLD for Gold). Crypto themes (BTC, ETH) are held as direct assets — not futures or proxies.
Equal-weight between themes
In Balanced mode, each of the top 2 themes receives 50% of capital. In Growth mode, 100% goes to the single strongest qualifying theme.
Rebalance on schedule
Balanced mode rebalances weekly (every 7 days). Growth mode rebalances monthly (every 30 days). At rebalance, the full process repeats — themes are re-ranked, winners are re-selected, and the portfolio is updated accordingly.
cadence
Rebalancing Timeline
Rebalance frequency depends on your mode. Balanced mode rebalances every 7 days (weekly). Growth mode rebalances every 30 days (monthly). The countdown to the next rebalance is displayed on the Live Picks and Performance pages.
On rebalance day: re-rank all themes, select new winners, sell outgoing positions, buy incoming picks, and adjust sizing to the new weights. The process typically takes 15–30 minutes to execute through a standard brokerage.
performance
Backtested Results
Themes tracked
19
17 ETFs + BTC + ETH
Momentum lookback
16–26 weeks
Balanced: 16w · Growth: 26w
Rebalance frequency
Weekly / Monthly
Balanced: 7d · Growth: 30d
Typical positions
1–2
Top 1–2 themes, equal weight
Position sizing
50 / 50
Equal-weight between themes
19-year CAGR
47.72%
vs 10.80% SPY (2006–2025)
Sharpe ratio
1.163
Risk-adjusted performance
Max drawdown
-46.4%
Worst peak-to-trough loss
start
Getting Started
Check the Live Picks page for current picks and their target weights.Live Picks
Review the Rankings page to understand which themes are leading and why.Rankings
Check the Performance page to see momentum metrics and the next rebalance date.Performance
Execute trades through your own brokerage on or near the rebalance date.
Repeat on schedule. The system does the analysis — your job is disciplined execution.