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⚔️ The Sword Process
With the current Shield signal positive (price above the Red Line), the paid Sword Process activates—providing the systematic research framework to capitalize on momentum in offensive regimes.
This integrated process includes:
Momentum Rankings: Monthly algorithm-driven selection of leaders.
Hypothetical Model Portfolio: Hypothetical trend-based model illustrating how signals could be applied.
Roundtable Video (Upcoming): Monthly executive briefing for deeper conceptual insights.
The Momentum Algorithm: Our Three Step Process
1. Absolute Momentum: Analysis of U.S. large-cap stocks using 6- and 12-month price momentum to identify established uptrends.
2. Risk-Adjustment: Adjustment for efficiency, incorporating T-Bill rates (risk-free) and volatility (standard deviation).
3. Quality-Adjustment: Standardization into Z-Scores, filtered for market cap to ensure liquidity and institutional quality.
The stocks with the highest final momentum scores form the core rankings input to the Sword Process.
⚔️ The NEW Top 5 Leaders (January)
These five names represent the current Sword Rankings
Hypothetical Model Portfolio Integration
This model is purely conceptual and educational—illustrating potential application of the Sword Process in a positive regime (not actual trading or advice).
Example Allocation Framework:
This model and Sword Ranking is for illustrative purposes only. Not financial advice. See full disclosures.
1. Apple (AAPL)
Rank: #1 Sector: Technology
The Setup: Apple reclaims the #1 spot this month. After hitting highs in early December, AAPL 0.00%↑ is in a healthy, constructive pullback. This “bull flag” consolidation often precedes the next leg higher.
Technical View: The trend remains bullish in within a short-term consolidation period. We are watching for a break above $275, which would clear the downtrend line and confirm a resumption of the primary trend.
2. Google (GOOG)
Rank: #2 Sector: Communication Services
The Setup: Google GOOG 0.00%↑ is exhibiting classic “stair-step” momentum. It broke out, pulled back to test previous resistance (now support), and is breaking out again.
Technical View: The stock retains a positive 8/21-day Moving Average cross—our key signal for short-term momentum strength.
3. Broadcom (AVGO)
Rank: #3 Sector: Semiconductors
The Setup: Broadcom has been a market leader for 3 years, and while momentum has cooled slightly relative to its peers, the structure remains intact.
Technical View: As other Semi-Conductor stars like Micron MU 0.00%↑ and Lam Research LRCX 0.00%↑ break out, AVGO 0.00%↑ is holding key support levels and attempting to rally despite recent volatility. We view this deceleration not as weakness, but as a “pause that refreshes.”
4. Eli Lilly (LLY)
Rank: #4 Sector: Healthcare
The Setup: The Healthcare Sector XLV 0.00%↑ is waking up, and LLY 0.00%↑ is the general leading the charge. The stock held support beautifully during the recent volatility and is breaking out again.
Technical View: This is a high-quality trend. The breakout late in the month signals that institutional money is rotating back into the “GLP-1” trade.
5. Johnson & Johnson (JNJ)
Rank: #5 Sector: Healthcare
The Setup: JNJ 0.00%↑ is the epitome of a “textbook” uptrend right now. It is grinding higher with low volatility—exactly what we like to see for the “Quality” factor of our M5 model.
Technical View: JNJ rallied to the upper envelope and found support immediately at the 21-day Moving Average, seemingly primed for the next leg up.
See you next week for the Momentum Signal update.