Regime-gated allocation with bounded index leverage

A confirmed gate, not a single-name call

When two long-horizon proxies sat above their 39-week averages, the plan allocated the book entirely to equity funds. When both sat below, it moved entirely into money-market cash equivalents. That move is a regime-switch: a binary change in book composition after a confirmed trend state.

A single indicator crossing its 39-week average was not treated as a valid regime change. Dual-proxy-confirmation required both a five-fund composite and a broad listed market composite to sit on the same side. Each series is an index-proxy, a stand-in for overall equity-market direction rather than a forecast for one name. The weekly 39-week average was used as a practical stand-in for the more common 200-day average.

Long sleeves and a full-book flip

A documented long sleeve in domestic stock funds opened, later exited after many months, and re-entered only after the next confirmed buy. Equity sleeves under the long-horizon switch were described as lasting about 18 months on average, which distinguished the method from short-interval timing.

Sector sleeves and an exit rule

Sector construction held five concurrent industry sleeves so one hot group could not become the entire book. Natural-resource and precious-metal groups were dropped after those groups posted weaker hit rates than the retained set.

After a large run in energy-services funds, a heavy inflow into a large sector fund was followed by a sharp drop in the next quarter and a further decline the following year. The archive used that sequence to show why a sector-sleeve needs an explicit exit rule.

A single broad market index was treated as an unsuitable yardstick for every fund. Peer-group averages were used instead to flag persistently weak holdings for removal.

A leverage-bound on the index overlay

Enhanced index funds wrapping a major market average were described as using futures and options to target a multiple of the index move, with a matching downside. A leverage-bound set that multiple before the position was opened so added futures-and-options exposure was capped in advance.

Raising decision frequency relative to the 18-month average hold was noted to increase the number of unsuccessful trades. A short-horizon leveraged overlay was therefore treated as an exposure filter rather than a default stance.