How to Rank Sector Strength Against SPY
The Macro Engine's sector leadership score ranks each sector from 0 to 4 against SPY, one point for each of four independent checks it passes. On 2026-09-30, only Technology cleared all four checks, while eight of the eleven scored sectors passed none of them at all.
How the Sector Leadership Score Is Actually Calculated
The sector leadership score is one of the Macro Engine's modules: a count from 0 to 4 of how many independent relative-strength checks a sector passes against SPY, not a continuous score sliding along a scale. Four binary yes-or-no questions, summed.
The four checks: whether the sector's own ratio to SPY sits above its 50-day moving average, whether that 50-day moving average's slope over the last 10 sessions is rising, whether its 20-day relative strength against SPY is positive, and whether it registered a 20-day breakout. Each check contributes exactly one point if it passes, nothing if it does not, so a sector's leadership_score_0_4 is a direct count, not a weighted blend the way the Stop Risk Score is.
On 2026-09-30, Technology was the only sector to clear all four: its ratio to SPY, 0.2545, sat above its own 50-day moving average, 0.2431, the slope of that average was rising, its 20-day relative strength was positive, 4.54%, and it registered a breakout. Health Care cleared three of the four, with a positive 20-day relative strength of 0.62% but no breakout. Energy cleared only one, a rising 50-day moving average slope, while its ratio sat below its own average and its 20-day relative strength was negative.
On 2026-09-30, the engine scored 11 sectors against SPY. 1 scored 4, Technology. 1 scored 3, Health Care. 1 scored 1, Energy. 8 scored 0: Communication Services, Consumer Staples, Industrials, Utilities, Real Estate, Financials, Consumer Discretionary and Materials.
On 2026-09-30, of 11 sectors scored against SPY, 1 scored 4 (Technology), 1 scored 3 (Health Care), 1 scored 1 (Energy), and 8 scored 0.
A score this concentrated, one sector clearing all four checks and eight clearing none, means genuine relative strength against SPY was narrow that day, not broad-based. Whether Technology sits in the cyclical or defensive bucket is a separate question this score does not answer on its own.
The score ranks sectors against each other and against SPY. It does not size a position or say which individual stock inside a leading sector is worth trading. Sizing an actual position and which phase of the cycle favors which sectors are both separate layers on top of this ranking.
What makes this state flip
This score has no single threshold to cross the way a bounded percentage does. It is four independent yes-or-no checks, summed. A sector can move a full point in either direction if just one of the four flips, a ratio crossing its own 50-day average, or a 20-day relative-strength reading crossing zero, without any of the other three checks changing at all.
Energy's score of 1 on 2026-09-30 shows how close that can sit: its 50-day moving average slope was rising, but its ratio to SPY was still below that same average, and its 20-day relative strength was still negative. A single one of those three flipping would move it to a score of 2.
What this does not tell you
The score ranks a sector against SPY over a fixed lookback, not against its own history or against another sector directly, beyond the shared scale of 0 to 4. It also treats all four checks as equally weighted: a sector that barely clears its 50-day average and a sector that clears it by a wide margin score the same single point.
It says nothing about which individual stocks inside a leading sector are actually driving the reading, or whether that sector is cyclical, defensive or something else. Both are separate questions covered elsewhere.
Frequently asked questions
What is the sector leadership score?
It is a count from 0 to 4 of how many independent relative-strength checks a sector passes against SPY: price above its 50-day moving average, a rising 50-day moving average slope, positive 20-day relative strength, and a 20-day breakout.
What are the four checks that make up the leadership score?
Whether the sector's ratio to SPY sits above its own 50-day moving average, whether that moving average's 10-session slope is rising, whether its 20-day relative strength against SPY is positive, and whether it registered a 20-day breakout. Each contributes exactly one point.
How concentrated was sector leadership on a given day?
On 2026-09-30, of 11 sectors scored, only 1, Technology, cleared all four checks. 8 of the 11 cleared none of them. Genuine leadership by this measure was narrow that day, not spread across many sectors.
Does a leadership score of 0 mean a sector is falling?
Not necessarily against its own price, only against SPY on these four specific checks. A sector scoring 0 failed all four relative-strength tests versus SPY that day; whether its own price was rising or falling outright is a separate question this score does not measure.
Is the leadership score the same as the cyclical versus defensive rotation read?
No. The rotation read compares a weighted cyclical sector basket against a weighted defensive basket as a whole. The leadership score ranks each of the 11 sectors individually against SPY on four checks, independent of which bucket, cyclical, defensive, yield or hybrid, that sector sits in.
Related
This score measures relative strength against SPY over a fixed lookback, not a guarantee the leading sector keeps leading. A sector clearing all four checks on one day can fail several of them on the next if its own price action or SPY's moves first.