Trends/Relative strength, cycles and structure

Sector relative strength

Compares a sector's performance with the market to see which sectors are leading.

Relative strength, cycles and structureBest on 6M, 1Y, 3YAlso called sector rotation

Illustration of the sector relative strength shape. It is a sketch, not real price data.

What it shows

Sector relative strength divides a sector index (for example the technology sector) by the broad market index. A rising line means the sector is beating the market.

Rotation is the idea that leadership moves from sector to sector over time. We show which ones lead and lag over 3 months.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Pick a sector index and the broad market index.
Ratio = sector ÷ market.
Compute the 63-bar change in the ratio.
Rank sectors by it.

Starting values: Window 63 bars. These are proposed and will be tuned on real price data before launch.

How to read it

The panel shows the sector against the market.
Rising: the sector leads.
Falling: lagging.

Status labels you may see

Label	What it means
Leading	Ratio up over 63 bars.
Lagging	Ratio down over 63 bars.
In line	Within 2%.

What cancels it

Nothing cancels it.

What traders check next

Rank among all sectors.
Trend of the ratio.
Which stocks drive it.

Limits

Sector definitions differ.
Leaders change.
Past leadership is not a forecast.

Try it in forecastviz

Open any ticker and choose Relative strength, cycles and structure → Sector relative strength in the left menu.
Switch between 6M, 1Y, 3Y to see how the picture changes.
Compare with Relative strength ratio and Relative strength line new high on the same chart.

Open on a ticker

Questions

Why compare to the market?

To remove the effect of a rising or falling market.

Do sectors rotate in a cycle?

Some books claim so. We make no claim.