Weekly Commentary: July 11, 2026
⚠️ Not financial advice. This is auto-generated each week by Anthropic's Claude (an AI model). Brian Beals is not a registered investment advisor, and Anthropic's Claude is not licensed to provide personalized financial advice. The screener is a research and methodology demo, not a recommendation system. Past performance does not predict future results. Do your own research before making any investment decisions.
By Brian Beals. Methodology and code: github.com/brianbeals/sector-rotation-screener. Commentary generated by Anthropic's Claude (claude-opus-4-8).
What the screen said this week
The screen classified the current environment as mid-cycle, driven by industrial production (INDPRO) running at +1.7% year over year, which sits inside the 0.0% to 4.0% band the rule set treats as steady expansion. The yield curve reading of +0.38 (the spread between longer and shorter dated Treasury yields) reinforced that classification. In plain terms, the macro inputs pointed to ongoing growth without the extremes that would flip the phase to early or late cycle.
Technology (XLK) topped the composite at 82.8, the only sector carrying a Buy signal this week. Its score came from a combination of strong seasonality (85.7), maximum cycle fit (100.0), and the highest relative strength in the group (61.2, with three-month relative strength of +19.60%). Communications (XLC) ranked second at 73.5 but was flagged Watch: its cycle fit was maxed at 100.0, yet relative strength lagged at 37.1, so the rule set held it back from a Buy until price action confirms. Every other sector landed in Hold territory, and no sector triggered the Avoid threshold (composite at or below 40), with Healthcare closest at 42.2.
Things worth noticing
The Watch flag on Communications illustrates a divergence worth understanding: the cycle model favored the sector, but its three-month relative strength was negative (-13.37%), meaning it underperformed the broad market recently. The rule set is explicitly waiting for that gap to close rather than acting on cycle fit alone. This is the mechanical difference between "cycle-favored" and "confirmed by price."
The Communications seasonality score also carries a "thin sample" tag, a reminder that its seasonal reading rests on fewer historical observations than the others and should be weighted with that caveat in mind.
Also notable: most sectors below Technology showed negative three-month relative strength, so the spread between the top score and the rest was wide this week. The signal-quality stats add context here. Since May 2011, Buy calls beat SPY only 51% of the time with a thin excess of +0.05%, so a Buy label describes a historical tendency of this rule set, not a strong edge.
Methodology reminder
The composite is the weighted sum of Seasonality (25%), Cycle Fit (40%), and Relative Strength (35%). Lookahead bias in the backtest is controlled using FRED ALFRED data vintages, meaning each historical week uses only the macro data that was actually published at that time. The backtest result (Strategy +636.32% vs SPY +626.21% since May 2011) is a property of this specific rule set applied to past data, not a forecast of future performance.