Volume Price Confirmation Indicator (VPCI) MA10 Tactical Sector Rotation Model

The VPCI MA10 Tactical Model combines the Volume Price Confirmation Indicator (VPCI) with a 10-period moving average filter to identify oversold conditions and potential trend reversals across major market sectors.

The model evaluates:

• Daily VPCI signals
• Weekly (10-week) moving average signals
• Monthly (10-month) moving average signals

These signals are analyzed in relation to deeply oversold VPCI conditions, defined as readings below a -0.40 threshold.

The Volume Price Confirmation Indicator (VPCI) itself is a technical indicator derived from the interaction between:

• Volume averages
• Volume-weighted moving averages
• Traditional simple moving averages
• Fast and slow trend periods

The goal of the indicator is to measure whether volume is confirming or diverging from price movement during changing market conditions.

Additional details regarding the construction of the VPCI indicator, along with supporting academic studies, can be found through the published research papers by Matt Lutey related to:

• Volume Price Confirmation Indicator (VPCI)
• Capital Weighted Volume (CWV)

These studies are available through the side links provided throughout this blog and through Google Scholar .

How the Model Works

The strategy begins by identifying sectors or securities with deeply oversold VPCI readings below the -0.40 threshold.

Once a security reaches this oversold level, the model then evaluates whether price can reclaim the corresponding:

• 10-day moving average,
• 10-week moving average,
• or 10-month moving average

within the following screening period.

If the security successfully retakes the moving average, the signal remains valid and the position may continue to qualify for portfolio inclusion.

If the security fails to reclaim the moving average during the screening period, the position is removed from consideration and sold.

Only securities passing this rule relative to the benchmark index are eligible for inclusion within the portfolio.

Real-Time Application Across the 11 S&P Sector ETFs

The real-time results shown throughout this blog apply the VPCI MA10 Tactical Model to all 11 Standard & Poor’s (S&P) sector exchange traded funds (ETFs), including:

• Technology
• Financials
• Healthcare
• Industrials
• Consumer sectors
• Energy
• Utilities
• Real Estate
• Materials
• Communication Services
• Staples

The objective is to identify:

• Relative strength
• Momentum confirmation
• Oversold reversals
• And tactical sector leadership

while incorporating both price trend behavior and volume confirmation into the allocation process.

Academic Research and Journal Publication

The underlying research and methodology behind this tactical allocation framework were further explored in publications including the Journal of Investing and related CWV/VPCI studies.

Readers interested in the full academic framework, methodology, and statistical testing can access the research papers through the links provided throughout this blog.

Rebuild the Strategy With One-on-One Coaching

If you would like to rebuild and implement this strategy yourself, one-on-one coaching sessions are available to walk through the full process step-by-step.

These sessions can cover:

• VPCI indicator construction

• Moving average integration

• Portfolio123 or platform implementation

• Sector ETF screening

• Tactical allocation rules

• Risk management and portfolio construction

• Real-time application and testing

Most strategy rebuilds can typically be completed over 3–4 total coaching sessions depending on the level of customization and platform setup desired.

The goal is to help investors, researchers, students, and professionals understand how to apply the model in practice and adapt it to their own investment process.

View the full slide deck and supporting research presentation <--Follow the link.