Last Updated on 5 January 2023 by automiamo.com

Decoding the following model in Tradingview

This is the sector rotation model where different sectors are stronger at different points in the economic cycle.

Here the result from my Tradingview account by creating this ad-hoc layout

Trying to compare relative strengths of sectors at different points in the economic cycle to sectors which are stronger at previous economic cycle.

Example: Industrial sector is seen strong during the early recovery. I want to see it stronger than the Tech sector – which is strong during full recession, the previous economic cycle – for confirmation of the actual early recovery investors are actually discounting.

Adding 200-periods and 50-periods simple moving averages (SMA) for better defining the trend.

chart above SMA50 and SMA200 = bullish = confirmation of the economic cycle

chart under SMA50 and SMA200 = bearish = not a confirmation of the economic cycle

chart under SMA50 or SMA200 = neutral = uncertainty, not a confirmation of the economic cycle.

What is Mr. Market discounting by now?

How you can see in the figure above, we have more confirmations (V symbols) at recovery cycle. No confirmation at Full Recession and one only confirmation at the early recession.

Mr Market doesn’t like the recession, not yet…

Giancarlo Pagliaroli

Disclaimer: The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by me.