A daily, two-layer, momentum-driven strategy that tilts to a bond-proxy front-runner (BDRY) and then builds diversified, hedged “Battleship” baskets across stocks, volatility, bonds, and commodities. It uses RSI, moving averages, and returns screens to pick top assets, adds hedges in downturns, and rebalances every day.

- What it looks for: The system asks, in effect, “Is the market in an uptrend or a downturn?” by checking momentum signals (notably RSI) on a bond-like proxy (BDRY) and on key equity proxies (SPY, QQQ, etc.). If signals say risk-on, it tilts toward long exposure; if signals say risk-off, it tilts toward hedges and safer assets. - How it builds positions: The strategy creates several tactical baskets (Battleship groups) that span equities, leveraged plays, hedges, bonds, commodities, and other sensitive assets. Each basket is constructed by ranking assets with momentum screens (moving-average momentum, cumulative returns, etc.) and then selecting the top few. Weights are assigned to pieces within each basket (for example 25%, 50%, 75%, etc.) to ensure diversification. - Decision flow: A large decision-tree evaluates many conditions in sequence. Depending on which conditions are met, the system assigns weights to a small set of assets that will be held for the next day. - Hedging and risk controls: The design includes explicit bear/hedge pathways (using SPXU, SQQQ, UVXY, VXX, etc.) and an anti-beta hedge (BTAL) in some paths to dampen risk while preserving upside. - Rebalance cadence: The strategy rebalances daily, recalculating all signals and choosing a new basket accordingly. - Outcome expectation: In favorable markets, expect a tilt toward broad-U.S. equity proxies and leveraged long bets. In volatile or downturn conditions, the model shifts toward hedges and safer exposures to preserve capital while still attempting to participate when the regime improves. - Caveat: The approach relies on multiple aggressive instruments (leveraged and inverse ETFs) and complex conditional logic. It can generate large swings and drawdowns, especially in sudden regime changes; it’s best suited for an investor comfortable with tactical, go-long-or-hedge style exposure and with risk tolerance for leverage and rapid regime shifts.

Out-of-sample, this strategy delivers superior risk-adjusted returns vs SPY: Sharpe 1.46 vs 0.93, annualized ~92% vs ~16%, alpha ~0.60, Calmar ~3.68, with built-in hedges. Drawdowns ~25% vs ~19%, but upside is far greater.