Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

Bullish Signs from the March 2012 Sector Rotation Model

Tue, Mar 27, 12:22 PM ET, by Corey Rosenbloom

What is the broader Sector Rotation Model saying about the current rally and state of the market?

Good things actually.

Let’s take a moment to view the current Sector Rotation Performance from three perspectives, starting with Absolute Performance so far in 2012:

To recap, the Sector Rotation Model breaks down the broader market into nine sectors as represented above with the tradable AMEX Sector SPDRs (XLK for Technology for example).

These nine sectors are divided into two broad categories:

  • Offensive/Aggressive Sectors (tend to outperform in a Bull/Rally mode)
  • Defensive/Conservative Sectors (tend to outperform in a Bear/Decline mode)

By assessing which sectors are outperforming, a trader or investor can get a sense of the broader stock market and economy.

In addition, savvy traders can scan to locate the strongest relative stocks in the strongest relative sectors for short-term trading opportunities (go with the winners!).

Ok, so what is the Model saying?

This is the picture of Bullish Strength – mainly in terms of the strong outperformance (greatest percentage increase in 2012) coming from the aggressive/offensive sectors of Financials (XLF), Technology (XLK), and Consumer Discretionary/Retail (XLY).

By the same token, the weakest sector performance comes from the Defensive sectors of Consumer Staples (XLP), Health Care (XLP) and a slight negative return (down 2.3%) for Utilities (XLU).

Energy – despite the headlines – is also an underperformer at 5.7%.

The next chart shows the sector performance RELATIVE to the S&P 500 (which is up roughly 13%):

This is just another way to view the performance where we ‘flatline’ the S&P 500 and then view the over or under-performance (relative to the 13% mark).

This perspective gives a clearer perspective of where sector strength or weakness resides – which is clearly in the Defensive (and Energy) sectors.

This next chart is a more advanced “Line” perspective of sector performance so far in 2012:

This chart is helpful to assess the trends in price, rather than the frozen “snap-shot” in time that the other charts provide.

You can also use it to view sector “clusters,” which is where different sectors cluster or travel together.

Two examples would be the XLI and XLB cluster (with the S&P 500) near 13% and the XLP, XLE, and XLV (defensive) cluster near the 5% line.

Again, the weakest sector is – and has been – Utilities (XLU) through 2012.

We generally do best to trade WITH sector trends rather than against them – meaning it would have been far more profitable to trade long with financials so far than trying to call a top and play a reversal.

The same is true with Utilities which were weakest from the start… and continued to be weak into late March (present).

Again, to me, the surprise from teh charts above is the Energy (XLE) sector which is registering a plus 6% performance – with all the focus on oil prices, one would expect the XLE to be among the top performers.

Anyway, continue watching the current Sector Performance for…

  • any signs of continuation (which suggests further bullish stock market activity into the future) or else
  • a reversal/rotation away from these developments (meaning a sudden reversal towards the Defensive Sectors and away from the Offensive Sectors would argue the opposite).

Be sure to view additional articles on previous Sector Rotation updates for more information:

“Sector Rotation Lessons and Insights from 2011″ (important reference post)

“What the Sector Rotation Model is Saying in July 2011″ (Bearish… and correct)

“Clear Bearish Signals Developing from the Sector Rotation Model” (May 2011 – right at the Top)

“Sector Performance from August to February (2011)” (Bullish insights)

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey's new book The Complete Trading Course (Wiley Finance) is now available!

blog.afraidtotrade.com


SDI Glossary: "Bearish" Definition
SDI Glossary: "Bullish" Definition
SDI Glossary: "price" Definition
SDI Glossary: "Finance" Definition
SDI Glossary: "Sector" Definition
This Article's Word Cloud:   Again   Bearish   Bullish   Consumer   Corey   Defensive   Energy   Model   Offensive   Performance   Rotation   Sector   Sectors   Technology   This   Utilities   afraidtotrade   also   broader   chart   charts   cluster   current   from   into   market   meaning   mode   more   next   nine   outperform   performance   perspective   relative   reversal   same   saying   sector   sectors   stock   strongest   tend   than   view   weakest   where   which   with   would

| More

Financial Stocks Liking the Prospect of Higher Fed Rates XLF FAS
Mon, Aug 29, 3:41 PM ET, by Corey Rosenbloom

The Financial and Bank stocks are loving the prospect of higher rates from the Federal ...

Beginning a Bearish Arc Lower for Tesla TSLA
Mon, Aug 29, 1:41 PM ET, by Corey Rosenbloom

Is Tesla (TSLA) about to fall off the cliff and plunge lower, completing another “Arc” ...

Rush to the Highs Emini Fibonacci Bounce Update Aug 29
Mon, Aug 29, 1:31 PM ET, by Corey Rosenbloom

Back toward the highs we go! It’s almost as if Chair Yellen said nothing that ...

Thanks Yellen Emini Fibonacci Grid Update August 26
Fri, Aug 26, 1:31 PM ET, by Corey Rosenbloom

Well THAT got interesting fast! Chair Yellen strongly hinted that conditions allow for a near-term ...

Gold's Collapse into Key Support Target August 25
Thu, Aug 25, 12:11 PM ET, by Corey Rosenbloom

Gold completed a Triangle and Price Projection Target toward the prior low which sets up ...

Bouncing Market Emini Fibonacci Grid Update August 25
Thu, Aug 25, 11:51 AM ET, by Corey Rosenbloom

After harshly joking about it Tuesday, we actually did get our expected pullback to a ...

Parabolic Arc and Big Rally for Novatel MIFI Analysis
Tue, Aug 23, 1:21 PM ET, by Corey Rosenbloom

Parabolic Arc, textbook Elliott third wave, to-the-penny 50% Fibonacci. These are just some of the ...

Never a Pullback Emini Fibonacci Grid Aug 23
Tue, Aug 23, 1:11 PM ET, by Corey Rosenbloom

Beuller? Beuller? Beuller? Pullback? Pullback? Pullback? Here’s today’s updated Fibonacci and Emini (@ES) trading levels ...

A Play for Whole Foods WFM Off Critical Support
Mon, Aug 22, 4:11 PM ET, by Corey Rosenbloom

Is it time to buy Whole Foods stock (WFM) for a rapid bounce swing trade? ...

Year to Date Sector Rotation Insights August 2016
Mon, Aug 22, 12:21 PM ET, by Corey Rosenbloom

Bull? Bear? Top forming? What’s the message from the Sector Rotation Model at the moment? ...

Range Continues for Emini Fibonacci Intraday Update Aug 22
Mon, Aug 22, 12:11 PM ET, by Corey Rosenbloom

One day we’ll get a breakout from this repeating range in the S&P 500 – ...

August 18 Emini Intraday Trading Levels Update
Thu, Aug 18, 12:21 PM ET, by Corey Rosenbloom

A short-term trading range for the @ES futures – similar to July – is repeating ...

Midday Successful Emini Fibonacci Bounce Update
Wed, Aug 17, 1:51 PM ET, by Corey Rosenbloom

Here’s a quick mid-day update of the point-perfect Fibonacci Retracement Level reversal for the @ES ...

A Perfect Pullback Lesson from Amazon AMZN
Wed, Aug 17, 12:11 PM ET, by Corey Rosenbloom

Amazon.com (AMZN) offers us a great lesson – and current opportunity – to study “Perfect ...

Technology and Utility ETFs Go Their Own Way XLK XLU
Tue, Aug 16, 12:11 PM ET, by Corey Rosenbloom

“You can go your own way!” was famously sung by Fleetwood Mac and for the ...

Small Pullback from the Highs Emini Fibonacci Grid Aug 16
Tue, Aug 16, 11:51 AM ET, by Corey Rosenbloom

Pullback? Updated levels? Uptrend continuing? Let’s take a look at our morning update. Here’s today’s ...

Start Your Monday with Corey and the Timing Research Show
Sat, Aug 13, 9:51 PM ET, by Corey Rosenbloom

I’m excited to announce that I’ll be returning to join a an exciting and informative ...

Gold Gone Wild with High Volatility Reversals
Fri, Aug 12, 3:11 PM ET, by Corey Rosenbloom

Gold (@GC) picked up volatility with large gaps and intraday strong reversals. Let’s pinpoint the ...

US Steel X Falls to Critical Support Pivot Trade
Fri, Aug 12, 12:21 PM ET, by Corey Rosenbloom

US Steel (X) surprised with a steeper retracement than expected, collapsing down from $28 to ...

August 12 Exciting Emini Fibonacci Grid Update
Fri, Aug 12, 12:11 PM ET, by Corey Rosenbloom

We’re seeing additional movement through our key Fibonacci Grid Levels. Here’s today’s updated Fibonacci and ...

NVIDIA NVDA Keeps Impressing with New Uptrend Highs
Thu, Aug 11, 4:11 PM ET, by Corey Rosenbloom

NVIDIA (NVDA) continues its strong bullish uptrend, giving us another example of the superiority of ...

Hey Our Emini Fibonacci Levels are Working August 11
Thu, Aug 11, 1:41 PM ET, by Corey Rosenbloom

If you followed our update from yesterday, you had a perfect plan for profit on ...

Dual Divergent Reversals in Stocks and Crude Oil
Wed, Aug 10, 2:41 PM ET, by Corey Rosenbloom

After holding at the highs, Stocks reversed lower today from their lofty heights. Crude Oil ...

Emini Pullback Planning Fibonacci Grid August 10
Wed, Aug 10, 2:31 PM ET, by Corey Rosenbloom

Here’s our update for today! Price pulled back and broke under our upper Fibonacci Level ...

GoPro GPRO Boldly Breaks Resistance into Bullish Zone
Mon, Aug 8, 1:11 PM ET, by Corey Rosenbloom

We’re seeing GoPro Inc (GPRO) flash on our stock scan this morning as it’s breaking ...

New Emini Fibonacci Retracement Grid August 8
Mon, Aug 8, 12:41 PM ET, by Corey Rosenbloom

Price jumped higher into the 2,180 @ES level this morning and (so far) pulled back ...

Join Corey for a Live Trading Challenge at the San Francisco Money Show August 24
Fri, Aug 5, 1:51 PM ET, by Corey Rosenbloom

I’m so excited about this opportunity! Join me live as I accept a live, real-money ...

Jobs Report Breakout to New Highs Emini Update Aug 5
Fri, Aug 5, 12:51 PM ET, by Corey Rosenbloom

Breakout! Short-Squeeze! Better than Expected Jobs Report! Buyers took control away from the bears today, ...

The Twitter Trap TWTR a Bear Trap Reversal
Thu, Aug 4, 2:21 PM ET, by Corey Rosenbloom

Bear Trap! Twitter shares surprised investors and traders with a strong gap lower in late ...

Flag Bounce Emini Fibonacci Grid Update August 4
Thu, Aug 4, 2:11 PM ET, by Corey Rosenbloom

Our Bounce Continued – price fell toward our initial Fibonacci Target and has now bounced ...

Crude Oil Finally Bounces and May Reverse Short Term Downtrend
Wed, Aug 3, 1:41 PM ET, by Corey Rosenbloom

Is Crude Oil @CL Snapping its Downtrend? After a persistent swing down from $50.00 toward ...

Fibonacci Bounce Emini Update Aug 3
Wed, Aug 3, 12:11 PM ET, by Corey Rosenbloom

Yesterday’s sell-swing took us straight to our Fibonacci Retracement target ahead of a bounce up ...

Back to the 20 Day EMA Target We Go Aug 2
Tue, Aug 2, 11:51 AM ET, by Corey Rosenbloom

In an uptrend price typically swings higher then pulls back toward a rising moving average. ...

Hey The Emini Fibonacci Grid Worked Update August 2
Tue, Aug 2, 11:31 AM ET, by Corey Rosenbloom

While price expanded the lengthy trading range, we saw this morning’s price action pull back ...

The BlackBerry Breakout BBRY August 1
Mon, Aug 1, 2:11 PM ET, by Corey Rosenbloom

BlackBerry shares (BBRY) broke free of daily and weekly resistance, triggering a new bullish phase. ...

Range Range Range Emini Market Update August 1
Mon, Aug 1, 12:31 PM ET, by Corey Rosenbloom

Price was on a volatile arc this morning that keep us within the lengthy trading ...

Quirks and Reversals in the Quad Market Grid Gold Oil Dollar
Fri, Jul 29, 12:31 PM ET, by Corey Rosenbloom

The weaker than expected GDP report this morning spiked volatility higher in our quad-market grid. ...

GDP Surprise Breakout from Emini Range July 29
Fri, Jul 29, 12:21 PM ET, by Corey Rosenbloom

A weaker than expected GDP report this morning was exactly the bullish catalyst needed to ...

The Seriously Strong Uptrend and New All Time High for Facebook FB
Thu, Jul 28, 1:21 PM ET, by Corey Rosenbloom

“Strong stocks tend to get stronger.” Facebook (FB) shares gave us another example of this ...

The Not New Same Emini Fibonacci Levels in the Range Update July 28
Thu, Jul 28, 1:11 PM ET, by Corey Rosenbloom

With the Fed NOT raising rates as expected, price responded with little fanfare – or ...

The Fed Does Nothing but Keep the Current Range Going
Wed, Jul 27, 3:31 PM ET, by Corey Rosenbloom

As widely expected, and with little fanfare, the Fed did absolutely nothing today except keep ...

Fed Day Emini Fibonacci Pullback Grid July 27
Wed, Jul 27, 12:11 PM ET, by Corey Rosenbloom

The Fed won’t raise rates later today at their meeting, and the market could rally ...

Triangle Midday Market Update and Stock Scan July 26
Tue, Jul 26, 4:11 PM ET, by Corey Rosenbloom

Today’s market activity was a volatile, big swing event that resulted in an intraday triangle ...

Down Goes McDonalds MCD July 26
Tue, Jul 26, 10:41 AM ET, by Corey Rosenbloom

McDonald’s (MCD) gives us another example of what can endlessly frustrate new traders. Beating earnings, ...

Same Pullback Same Emini Fibonacci Grid Plan July 25
Mon, Jul 25, 12:21 PM ET, by Corey Rosenbloom

We start the new week with clear echoes to last week. Namely, we’re still trading ...

Down Drips Crude Oil to New Swing Lows July 22
Fri, Jul 22, 2:15 PM ET, by Corey Rosenbloom

In a somewhat surprising outcome, Crude Oil dips to a new swing low at the ...

Yahoo YHOO Surprises with Bullish Breakout into Open Air
Fri, Jul 22, 12:35 PM ET, by Corey Rosenbloom

As the stock market bull continues, we continue to see stocks breakout to new highs. ...

The Raging Bull Continues Emini Grid Update July 22
Fri, Jul 22, 12:15 PM ET, by Corey Rosenbloom

Bear? What Bear? Are there any bears left in the world? Price retraced toward, then ...

Might This Be the Actual Pullback Emini Fibonacci Grid July 21
Thu, Jul 21, 2:15 PM ET, by Corey Rosenbloom

Is this our first actual pullback since the early July breakout?! Here’s today’s updated Fibonacci ...

Neverending Bull Market Breakout and Stock Scan July 20
Wed, Jul 20, 3:55 PM ET, by Corey Rosenbloom

Buyers continued to short-squeeze the market through to new all-time highs! Let’s update our levels ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

Bullish Signs from the March 2012 Sector Rotation Model | Self Directed Investor | Copyright © 2008 - 2016, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of serious individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.