November at a glance
- Energy is now the top-ranked sector. VDE’s score rose to +6, the highest on the board. Both models add to it: Elev8 to 10.0% and Top3 to 25.3%.
- Top3 keeps the same three sectors (Energy, Health Care, Technology) but moves about 11 points out of Technology and into Energy and Health Care.
- Elev8 rotates three sleeves. It sells Communication Services, Consumer Discretionary and Materials, and buys Consumer Staples, Utilities and Real Estate.
- October: Top3 returned +2.87% and Elev8 +1.12%, against +0.69% for the S&P 500 (VOO). That is +218 bp for Top3 and +43 bp for Elev8.
- 2026 YTD: Top3 is up 18.64%, Elev8 9.69% and VOO 13.77%.
How the models work
Both models are monthly sector rotation strategies built from the eleven Vanguard sector ETFs. Each sector gets a composite score from price pattern, analyst-rating breadth (simple and weighted mean ratings), an overbought/oversold reading, sector- and industry-level technicals, and two macro trend inputs. Elev8 holds the eight highest-ranked sectors, tilting weights toward the strongest scores. Top3 holds only the three highest-ranked sectors. Both rebalance at month-end and aim to outperform the Vanguard S&P 500 ETF (VOO) over a full market cycle.
Methodology note for November: The macro trend inputs for this rebalance are commodity trend (Commod. UP) and U.S. dollar trend (USD UP), replacing the equity and rate trend inputs used in October. November scores are therefore not strictly comparable to October’s, and the October column in the grid below is shown for reference only.
Top3: same three sectors, less Technology
Energy, Health Care and Information Technology remain the three highest-ranked sectors, so Top3 makes no sector changes. What changes is the balance between them. Technology’s score fell from +5 to +3: its price pattern still reads as a bullish reversal, but sector-level technicals weakened and both macro inputs are neutral to negative for it. Energy rose to +6 on a bullish reversal, strong industry technicals and a supportive commodity trend. The rebalance cuts VGT by about 11 points and moves that money into VDE and VHT.
| Sector ETF | October | November | Change (pp) | Active vs. S&P 500 (pp) | Trade |
|---|---|---|---|---|---|
| VGT Information Technology | 54.9% | 44.3% | -10.6 | +8.2 | Trim |
| VHT Health Care | 25.6% | 30.4% | +4.8 | +19.8 | Add |
| VDE Energy | 19.5% | 25.3% | +5.8 | +21.4 | Add |
| Total | 100.0% | 100.0% |
November weights are from the Top3 positions file dated October 29. Active weights are measured against S&P 500 sector weights. Totals may not sum exactly because of rounding.
Financials tied Technology at +3 but stays out of Top3 on the tiebreak. With Technology’s lead now at zero, Financials is the first sector to watch at the December rebalance.
Elev8: three sells, three buys
Elev8 sells three sectors this month. Communication Services (VOX) collapsed to −6. It is in a downtrend and scores negative on every technical and macro input except the oversold reading. Consumer Discretionary (VCR) slipped to −3, and Materials (VAW) missed the cut on the tiebreak in a four-way tie at −2.
The three replacements are Consumer Staples (VDC), Utilities (VPU) and Real Estate (VNQ). All three still score below zero. They enter because their scores improved sharply under the new commodity input and they rank above the sectors being sold, not because they look strong in absolute terms. Their combined weight is a modest 11.5%. Most of the risk budget stays in the four positive-scoring sectors (Technology, Health Care, Financials and Energy), which together make up about 81% of the model.
| Sector ETF | October | November | Change (pp) | Active vs. S&P 500 (pp) | Trade |
|---|---|---|---|---|---|
| VGT Information Technology | 42.5% | 40.1% | -2.3 | +3.0 | Trim |
| VHT Health Care | 12.9% | 16.2% | +3.2 | +5.8 | Add |
| VFH Financials | 12.8% | 14.4% | +1.6 | +2.1 | Add |
| VDE Energy | 7.0% | 10.0% | +3.0 | +6.2 | Add |
| VIS Industrials | 7.9% | 7.8% | – | -0.2 | Hold |
| VDC Consumer Staples | – | 6.2% | +6.2 | +1.3 | BUY (new) |
| VPU Utilities | – | 3.0% | +3.0 | +0.9 | BUY (new) |
| VNQ Real Estate | – | 2.3% | +2.3 | +0.5 | BUY (new) |
| VCR Consumer Discretionary | 5.9% | – | -5.9 | -8.9 | SELL (exit) |
| VOX Communication Services | 9.3% | – | -9.3 | -8.9 | SELL (exit) |
| VAW Materials | 1.8% | – | -1.8 | -1.9 | SELL (exit) |
| Total | 100.0% | 100.0% |
Weights are at October 29 closing prices. Active weights are measured against S&P 500 sector weights.
Against the S&P 500, Elev8’s largest active positions are now overweights in Energy (+6.2 pp) and Health Care (+5.8 pp), and underweights in Communication Services and Consumer Discretionary (about −8.9 pp each). Technology remains a modest overweight (+3.0 pp) even after the trim.
November indicator grid
Elev8 and Top3 use the same sector scores. Each input is scored −1, 0 or +1, except the Sector input, which can reach +2. Rows are sorted by total score.
| Sector ETF | Price pattern | Pattern | Mean | Wtd. | OB/OS | Sector | Ind. | Commod. UP | USD UP | Nov. score | Oct. score | Elev8 | Top3 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| VDE Energy | Bullish Reversal | +1 | +1 | +1 | 0 | +2 | +1 | +1 | -1 | +6 | +5 | 10.0% | 25.3% |
| VHT Health Care | Bullish Reversal | +1 | +1 | +1 | 0 | +2 | +1 | -1 | -1 | +4 | +5 | 16.2% | 30.4% |
| VGT Information Technology | Bullish Reversal | +1 | +1 | +1 | 0 | +1 | 0 | -1 | 0 | +3 | +5 | 40.1% | 44.3% |
| VFH Financials | Consolidation | 0 | +1 | +1 | 0 | 0 | 0 | 0 | +1 | +3 | +3 | 14.4% | – |
| VDC Consumer Staples | Consolidation | 0 | -1 | -1 | 0 | 0 | 0 | +1 | 0 | -1 | -6 | 6.2% | – |
| VIS Industrials | Support | 0 | -1 | +1 | 0 | -1 | -1 | +1 | -1 | -2 | +0 | 7.8% | – |
| VPU Utilities | Consolidation | 0 | -1 | -1 | 0 | 0 | 0 | +1 | -1 | -2 | -6 | 3.0% | – |
| VNQ Real Estate | Consolidation | 0 | -1 | -1 | 0 | 0 | 0 | +1 | -1 | -2 | -3 | 2.3% | – |
| VAW Materials | Consolidation | 0 | -1 | -1 | 0 | 0 | 0 | +1 | -1 | -2 | +0 | – | – |
| VCR Consumer Discretionary | Consolidation | 0 | -1 | -1 | 0 | 0 | -1 | -1 | +1 | -3 | -2 | – | – |
| VOX Communication Services | Downtrend | -1 | -1 | -1 | +1 | -1 | -1 | -1 | -1 | -6 | +0 | – | – |
Green = positive input, red = negative, gray = neutral. October scores used different macro inputs (Equity UP / Rates UP) and are shown for reference.
October performance recap
| Model (net) | 1 Month | 3 Months | 6 Months | 2026 YTD | 1 Year | 2025 |
|---|---|---|---|---|---|---|
| Elev8 | 1.12% | 5.53% | 9.49% | 9.69% | 7.57% | 14.83% |
| Top3 | 2.87% | 7.86% | 12.24% | 18.64% | 12.01% | 15.41% |
| S&P 500 (VOO) | 0.69% | 5.74% | 8.71% | 13.77% | 13.22% | 17.82% |
| Elev8 vs. VOO | +43 bp | -21 bp | +78 bp | -408 bp | -565 bp | -299 bp |
| Top3 vs. VOO | +218 bp | +212 bp | +353 bp | +487 bp | -121 bp | -241 bp |
Trailing returns through October 29, 2026, net, from the ETF Action model tearsheets. 2025 is the calendar-year return. Relative figures are in basis points.
What drove October
October rewarded October’s positioning. Energy was the best-performing sector over the month, with VDE up about 11.5% on price. Communication Services was the worst, with VOX down about 8.7%. Technology slipped roughly 2%.
Top3 (+218 bp vs. VOO). By our estimate, the overweight in Energy was the largest single source of excess return, adding roughly 160 bp. Holding no Communication Services added about 100 bp, and the Health Care overweight about 95 bp. Partly offsetting those gains, the large Technology overweight cost about 55 bp. Not owning Financials, Consumer Discretionary and Consumer Staples, all of which rallied, cost roughly 30–50 bp each.
Elev8 (+43 bp vs. VOO). The same overweights in Energy (about +35 bp) and Health Care (about +20 bp) did most of the work. The main drags were holding no Consumer Staples (about −30 bp) or Utilities (about −14 bp), along with the Technology overweight (about −13 bp). Because Elev8 owned Communication Services at close to benchmark weight, it got none of the lift Top3 got from avoiding that sector. The November rebalance addresses both.
Attribution is our estimate. It uses sector-level allocation effects from ETF price changes between the September 29 and October 29 rebalance dates, excludes dividends, and is measured against a sector-weighted S&P 500. It is meant to show direction and rough size, not exact figures. On this basis, our estimated model returns (Elev8 +1.26%, Top3 +2.98%) are close to the tearsheet figures.
The bigger picture
For the year, the gap between the two models comes down to concentration. Top3 has held this year’s leaders at full conviction and is 487 bp ahead of VOO year to date. Elev8 spreads its weight across eight sectors and has lagged by 408 bp in a market where a few sectors have done most of the work. Energy has dominated 2026: XLE was up nearly 52% YTD as of October 23, while Communication Services was down almost 10%. Both models are underweight Communication Services in November.
On the macro side, the Fed held the funds rate at 3.75%–4.00% on October 28 in a 10–2 vote, following September’s 25 bp hike. Markets are now focused on whether December brings another increase.
Sources and notes
- Model positions, scores and weights: ETFSector.com Elev8 and Top3 model position files, September 29 and October 29, 2026.
- Performance: ETF Action model fact sheets, “ETF Sector – Elev8” and “T3SectorLong” (Top3), as of October 29, 2026, Model – Net rows. Benchmark: Vanguard S&P 500 ETF (VOO). First value date: August 30, 2024.
- Federal Reserve decision: Admirals, “FOMC October 2026: Fed Holds Rates”.
- Sector YTD figures: Tapeboard weekly recap, October 19–23, 2026.
Important information. Elev8 and Top3 are hypothetical model portfolios published for informational and educational purposes only. They are not investable funds, and nothing here is a recommendation to buy or sell any security or a solicitation of any kind. Performance is hypothetical, calculated using FactSet data with ETF Action’s software and methodologies, and includes dividends and acquired fund fees. It does not reflect trading costs, taxes or advisory fees. Hypothetical results have inherent limitations, and there is no guarantee they could have been achieved in an actual account. Past performance is not indicative of future results, and the models’ goal of outperforming over a full market cycle may not be met. This content does not consider any individual’s objectives or financial situation. Readers should consult a qualified financial professional before making investment decisions.
