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A publication of Mecox Bay Research

The two-layer framework

Two rules. Clearly defined. Consistently applied.

Equal weighting decides how to spread risk. The 200-day rule decides whether to take the risk at all. Two published rules, applied the same way every week, with nothing left to discretion or forecasting.

01

Equal weighting, how to spread risk

A cap-weighted index concentrates in sectors that have already risen the most. Equal weighting does the opposite: each month it systematically rebalances away from what has become dominant and toward what has been overlooked. The goal is to avoid being overcommitted to yesterday's winner, rather than to predict the next one.

02

200-day trend rule, whether to take risk at all

Each sector is compared to its 200-day moving average daily. If a sector is in a confirmed uptrend, the strategy participates. If the sector breaks down past the threshold, that allocation moves to cash. The rule fires, and the model follows.

Buy signalINVEST  price > SMA × 1.01
Sell signalCASH    price < SMA × 0.99
The S&P 500 is not equally diversified, cap weights vs. the strategy's 9.09% equal weights across all 11 sectors
Same 11 sectors, very different-sized bets: S&P 500 cap weights vs. the strategy's equal 9.09% slices. Weights as of June 30, 2026. Click to enlarge.

Coverage universe

All 11 S&P 500 sectors. Every week.

The report covers every major sector of the U.S. economy, not just the broad index. Sector-level visibility is the whole point.

XLK Technology
XLF Financials
XLV Health Care
XLY Cons. Discretionary
XLI Industrials
XLP Cons. Staples
XLE Energy
XLU Utilities
XLB Materials
XLRE Real Estate
XLC Comm. Services