Dirac 2026 Portfolio Review: 12 June 2026

Say “Cheese”

The Dirac Portfolio attempts to outperform the broader US Equity market (as represented by SPY – S&P 500 ETF) by rotating between sectors in that broader market.

At present, the momentum/acceleration model that has been used to manage this portfolio is showing the following suggestions:

with five ETFs generating Mean Reversion Buy recommendations.

Over the past week my adjustments to the portfolio look like this (red box):

where I have sold the top performing XLK (Technology) ETF out of the portfolio and replaced it with the less volatile XLF (Financials) ETF.

Relative performance of the sector ETFs within the broader market look like this:

with XLK sitting in third place and being beaten out by only XLB (Materials) and XLP (Consumer Staples).

A graphical representation of relative performance can be seen in the following screenshot of a plot taken from my new workbook:

that shows Energy (XLE) dominating through the first 4 months of the year and Technology taking over in the past 2 months. Momentum in all sectors appears to be weakening over the past 2 weeks.

Let’s take a look at XLK and ALF:

Despite the strength evident in the previous screenshot, acceleration (green line) has turned negative and momentum (blue line) has crossed below it’s 14-period Wilder Moving Average (brown line) – so I have chosen to lock in close to $3,900 in profit at this point.

XLF is showing the opposite kind of behaviour:

with momentum crossing above it’s Wilder MA on positive acceleration.

In addition to the MR Buy recommendation generated by the momentum/acceleration model

XLF ranks #4 in my new momentum rotation model, although this is 3rd in the Dirac “quiver” since real estate (XLRE) is presently not included. XLK remains at #1 here because of it’s dominance/strength over the past 6 months – but the question always comes to when to take profits.

The second ranked ETF in the new model, XLI (Industrials), is also a recommended Buy in the momentum/acceleration model:

and is presently held in the portfolio and still showing strong Buy signals – so will remain in the portfolio.

XLV is the other ETF currently held in the portfolio and remains as a Hold. I am watching XLB and may add this to the portfolio next week to meet my 100% fund allocation goal. Unless there is obvious weakness I will likely add this fourth ETF to the portfolio – although I may decide to adjust the weighted holdings in the other 3 ETF’s – but I am still working on the allocation rules.

Performance of the portfolio to date looks like this:

and is holding up better than I had expected.