Smart Money Tracker

📚 Methodology & Disclosures

The Forecortex Smart Money Tracker is a quantitative tool designed to track the relative performance and momentum of various market segments. It maps segments into four key quadrants: Bullish, Recovering, Decelerating, and Bearish. This allows investors to visualize how institutional capital ("Smart Money") rotates across the market.

🇺🇸 US Equities Mode (S&P 1500)

This mode constructs synthetic GICS Sub-Industry indices directly from the S&P 1500 constituents.

• Risk Parity (Volatility Normalization): Each stock's weight is proportional to the inverse of its 20-day rolling volatility (1 / σ₂₀). This ensures low-volatility stocks receive proportionally more weight, preventing volatile outliers from dominating the index trajectory.
• Liquidity Weighting (ADV Dollar Volume): Weights are further scaled by each stock's 20-day average dollar volume (Price × ADV₂₀). Using 20-day ADV instead of daily volume stabilizes against event-driven volume spikes.
• Custom Universe Baseline: Sub-industry rotation paths are plotted relative to a custom baseline representing the overall risk-adjusted, liquidity-weighted market return of all S&P 1500 stocks.
• Override Injection: To accurately reflect true institutional capital flows, the model mathematically injects highly liquid, non-S&P 1500 mega-caps (such as foreign-domiciled ADRs and pre-profitability hyper-growth companies) into their respective GICS sub-industries. Tickers such as TSM, ASML, SHOP, and ARM are mapped to their official GICS classifications and subjected to the exact same Risk Parity and Liquidity Weighting rules. Recent IPOs are withheld from the calculation until they establish a 21-day trading history to satisfy the volatility and ADV baselines.

🌍 Global Macro Mode (Country ETFs)

This mode tracks a curated watchlist of 14 international country-specific ETFs.

• Direct Pricing: We use the raw adjusted close price of the ETFs without any synthetic index construction or Risk Parity weighting.
• ACWX Baseline: The country ETFs are plotted directly against the MSCI ACWI ex-USA Index (ACWX) as the definitive benchmark denominator.

📐 Multi-Layer EMA Smoothing & Normalization

Both modes utilize a mathematical framework with 4 layers of Exponential Moving Averages (EMA) smoothing to produce the signature rotation trails:

• Layer 1 (Smoothing): Smooth the raw relative performance ratio with a 14-period short EMA.
• Layer 2 (Relative Performance): Compare the smoothed ratio to a 50-period long EMA trend baseline (X-axis).
• Layer 3 (Relative Momentum): Compute a 14-period rate-of-change of the performance coordinate to establish the momentum coordinate (Y-axis).
• Layer 4 (Trajectory Smoothing): Apply a final 3-period EMA to both X and Y coordinates to smooth the curves.
• Z-Score Normalization: Perform a 20-week rolling Z-score standardization, scaled (K=5) and centered around the benchmark origin at (0,0).

⏱️ Historical Lookback

Calculations are performed utilizing weekly price data covering the last 2 years (approximately 104 weekly bars). The tail slider represents weeks, not days.

⚠️ Important Cautions & Disclaimers

The public must exercise caution when utilizing this tool. While it is designed to aid in spotting macro capital shifts, users should remain aware of the following structural limitations:

• Sub-Industry Coverage: The US Equities mode covers the S&P 1500 universe. Sub-industries with fewer than 2 stocks with sufficient price history are excluded. Highly illiquid or thinly traded stocks may be underrepresented.
• Survivorship and Rebalancing: The S&P 1500 roster is a point-in-time snapshot and does not dynamically adjust for index additions, removals, or delistings during the lookback window. This introduces mild survivorship bias.
• Supporting Tool Only: This dashboard is provided strictly for educational and informational purposes. It should be used as a supporting analytical tool in conjunction with other macroeconomic indicators, technical analysis, and fundamental research. It does not constitute financial or investment advice.