Capital Rotational Event (CRE)Capital Rotational Event (CRE) – Inter-Asset Rotation Detector
This open-source, non-overlay indicator identifies potential **capital rotation events** between two user-selected assets by combining:
1. Relative Strength (RS) — measures how one asset is performing compared to another
2. Momentum of that RS line — detects acceleration or deceleration in the relative outperformance
The goal is to highlight periods when capital appears to be rotating **into** or **out of** the second asset (e.g., from stocks → gold, equities → bonds, risk-on → risk-off, etc.).
Core Concept
In macro-driven or rotational markets, money often flows between asset classes or correlated instruments. When one asset starts consistently outperforming another (and the outperformance is accelerating), it can signal a shift in investor preference, risk appetite, or sector leadership.
This script uses a smoothed relative strength ratio + its momentum to create a simple, objective filter for these rotational shifts.
How It Works
1. Fetches closing prices of two symbols:
- Asset #1 (lead/default: SPY) – the reference/benchmark
- Asset #2 (rotate into/default: GLD) – the asset being evaluated
2. Calculates Relative Strength line:
RS = SMA( (close₂ / close₁) × 100 , length )
→ Values > 50 = Asset 2 outperforming Asset 1
→ Values < 50 = Asset 1 outperforming Asset 2
3. Computes momentum of the RS line:
Mom(RS) = SMA( change(RS) , momentum length )
4. Generates CRE signal:
- Bullish CRE (+1): RS > its own SMA **and** RS momentum > 0
→ Asset 2 is outperforming **and** the outperformance is accelerating
- Bearish CRE (-1): RS < its own SMA **and** RS momentum < 0
→ Asset 2 is underperforming **and** the underperformance is accelerating
- Neutral (0): otherwise
Visual Output
- Blue line: Relative Strength (Asset 2 vs Asset 1, scaled around 100)
- Gray hline at 50: Neutral level
- Orange line: Momentum of RS (oscillates around zero)
- Green upward triangles (bottom): Bullish Capital Rotation Event
- Red downward triangles (top): Bearish Capital Rotation Event
- Background coloring: light green (bullish rotation), light red (bearish rotation)
Why this combination?
- Raw RS ratio shows **who is stronger**, but can be slow-moving or noisy.
- Adding momentum of RS filters for **dynamic shifts** — catching the moments when rotation is actually gaining steam rather than just drifting.
- The dual-condition logic (RS above/below average + positive/negative momentum) reduces false signals and focuses on meaningful acceleration in relative performance.
Typical Use Cases
- Macro rotation: SPY vs GLD (risk-on vs safe-haven), SPY vs TLT (equities vs bonds), QQQ vs XLF (tech vs financials)
- Sector rotation: XLE vs XLU (energy vs utilities), XLK vs XLV (tech vs healthcare)
- Currency pairs or crypto: BTCUSD vs ETHUSD, USD vs gold, etc.
- Timeframes: Daily/weekly for macro swings, 4h/1h for shorter tactical rotations
How to Use
1. Apply to any chart (timeframe of your choice).
2. Set Asset #1 (benchmark) and Asset #2 (target) via inputs.
3. Adjust RS Length (default 14) and Momentum Length (default 9) to match your timeframe.
4. Watch for triangle signals + background color change as early clues of rotation.
5. Combine with price action on the actual assets — CRE is a relative bias tool, not a direct buy/sell signal.
6. Best in trending or regime-shifting markets; less useful in strong correlated moves.
Inputs
- Asset #1 (lead): default SPY
- Asset #2 (rotate into): default GLD
- RS Length: smoothing period for relative strength (default 14)
- Momentum Length: smoothing period for RS change (default 9)
Publishing Notes
- Publish with a clean chart (only this indicator active).
- Recommended example setup: daily or 4h chart with SPY + GLD (or your preferred pair).
- No other overlays/indicators needed for basic interpretation.
This script is fully open-source for learning and transparency. It is an educational tool — not a guaranteed predictor of market direction. Trading and investing involve significant risk of loss.
Feedback welcome — happy rotating!
Indikator Pine Script®


















