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Sector Intelligence

Sector Rotation Heatmap

Aggregate analysis across all 33 scanners showing which sectors have the most high-grade setups. Institutional money flow made visible. Updated daily.

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What is this pattern?

The Sector Rotation Heatmap represents a fundamentally different approach to market analysis. Instead of examining individual stocks, it aggregates results from all 33 scanners to paint a picture of where institutional money is flowing at the sector level. Sectors with the highest concentration of A+ and A setups are the ones where institutional demand is strongest across multiple independent methodologies.

The logic is straightforward but powerful. If Technology has 23 A+ setups, 45 A setups, and 42 B+ setups across bull flags, VCPs, Minervini trend templates, insider buying, and other scanners — while Energy has only 5 A+ setups and 12 A setups — the signal is clear: institutional money is heavily flowing into Technology. This cross-scanner aggregation provides a view that no single indicator can match, because it synthesizes pattern recognition, fundamental screening, volume analysis, and insider activity into a single sector-level scorecard.

The weighted scoring system — where A+ setups count 4 points, A setups count 3, B+ count 2, and B count 1 — ensures that quality trumps quantity. A sector with fewer total setups but a higher concentration of A+ grades will rank above a sector with many mediocre setups. Sectors are ranked by this weighted score, with the top 2 earning A+ grades and subsequent tiers following the standard grading scale. Each sector entry shows its top tickers so you can immediately drill into the leaders driving the sector's strength.

Origin & History

Sector rotation theory was formalized by Sam Stovall in his work at Standard & Poor's, published in S&P's Guide to Sector Investing (1996). The concept of sectors rotating through business cycles was influenced by earlier work on the stock market cycle by Martin Zweig, Edson Gould, and the National Bureau of Economic Research. Fidelity Investments popularized sector-based investing through their Select sector mutual funds starting in the 1980s. In modern markets, quantitative firms like Renaissance Technologies and AQR Capital Management use sophisticated sector momentum and rotation models as key components of their trading systems. The aggregation of multi-scanner results into a sector heatmap is a novel approach that synthesizes technical and fundamental signals at the sector level.

Detection Criteria

Our scanner evaluates the following criteria when detecting Sector Rotation Heatmap setups across 5,000+ stocks daily.

Setup count per GICS sector across all scanners
By aggregating results from all 33 scanners, the system counts how many individual stock setups exist within each GICS sector. Higher setup counts indicate broader institutional interest across multiple analytical frameworks within that sector.
Weighted score calculation
The weighted scoring formula — (A+ × 4) + (A × 3) + (B+ × 2) + (B × 1) — ensures that quality is prioritized over quantity. A sector with fewer but higher-graded setups will rank above one with many low-quality setups, reflecting where the strongest institutional conviction exists.
Sector ranking by weighted score
Sectors are sorted by their weighted scores to produce a clear hierarchy of institutional interest. The top 2 sectors receive A+ grades, the next 2 receive A, the next 3 receive B+, and remaining sectors receive B — providing an at-a-glance view of where money is flowing.
Top tickers per sector
For each sector, the system identifies the tickers that appear in the most scanners — these are the stocks driving the sector's strength. This drill-down allows traders to quickly identify the leaders within the strongest sectors.
Grade distribution analysis
The breakdown of A+/A/B+/B counts within each sector reveals the quality profile. A sector with concentrated A+ setups has different implications than one with widely distributed B setups — both may have similar total counts but very different investment implications.

Grading Breakdown

For sector rotation, an A+ grade means the sector ranks in the top 2 by weighted setup score — calculated as (A+ × 4) + (A × 3) + (B+ × 2) + (B × 1) — across all scanners. An A grade covers the next 2 sectors. B+ covers the next 3 sectors. B covers any remaining sector with 5+ total setups detected. This is not a prediction of future price movement — it is a way to prioritize which charts deserve your attention first.

A+
Textbook setup — strong confluence across all criteria. Highest conviction.
A
High-quality setup worth watching closely. Minor criteria may be slightly off.
B+
Decent setup with some reservations. One or two criteria fall short of ideal.
B
Pattern detected but lower conviction. Use as a watchlist candidate, not a trade trigger.

Common Mistakes to Avoid

Over-concentrating in the top-ranked sector without diversification — even the strongest sector can rotate out of favor quickly; the heatmap is a guide for overweighting, not an all-in signal
Ignoring sectors with fewer setups but higher quality grades — a sector with 10 A+ setups may be a better opportunity than one with 100 B setups, even though the latter has a higher total count
Using sector rotation data as a standalone strategy without examining individual stock charts — the sector-level view tells you where to look, but trade selection still requires analyzing specific setups within the favored sectors

How to Trade This Pattern

Entry

Use the sector heatmap as a top-down allocation guide. Overweight your portfolio toward the top 2-3 sectors and underweight or avoid the bottom-ranked sectors. Within favored sectors, select individual stocks using the top tickers listed for each sector.

Stop Loss

Reassess sector allocation when the heatmap shifts — if a sector drops from A+ to B or lower, reduce exposure. Sector rotation typically unfolds over weeks to months, so check the heatmap at least weekly to stay aligned with the current flow of capital.

Price Target

The target is sustained outperformance through sector alignment. By consistently overweighting sectors where the most scanner signals converge, you position your portfolio to benefit from the same institutional flows that are driving the setup concentration.

This is educational content only. Not financial advice. Always do your own research and manage risk appropriately.

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AskLivermore scans 5,000+ NASDAQ and NYSE stocks daily · Not financial advice · Past performance does not guarantee future results