Sector Rotation: What's Working, and What's Not?

What is a sector rotation strategy? Today we'll use the Relative Rotation Graphs (RRG) to visualize how the eleven S&P 500 sectors are rotating through periods of strength and weakness. We'll also discuss how to identify opportunities for outperformance and highlight three particular sectors: Technology, Industrials, and Real Estate. You should visualize sector rotation and identify where are the opportunities of emerging outperformance.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Dave helps active investors and financial advisors make more informed investment decisions, inject more discipline into their investment process, and enrich relationships with their clients. Feel better about making better decisions!

He's also President and Chief Strategist at Sierra Alpha Research LLC, a boutique investment research and consulting firm focused on managing risk through market awareness. He combines the strengths of technical analysis, behavioral finance, and data visualization to identify investment opportunities and enrich relationships between advisors and clients.

Dave was previously a Managing Director of Research for Fidelity Investments in Boston, a Past President of the Chartered Market Technician (CMT) Association, and started in the financial industry just after the March 2000 market top at Bloomberg in New York.

✔ W E B S I T E
✔ T W I T T E R
✔ L I N K E D I N
✔ F A C E B O O K

#MarketMisbehavior #SectorRotation #RelativeRotationGraphs

[percevalzinzin]

"It doesn't answer the questions, it tells you the questions you should be answering"
I love this one!!!

[oneordinarycitizen]

Sector rotation is the only way to go. I've been investing and watching the markets for over 40 years and this is only way that I have seen that passes the smell test.

[davewilliamson]

Dave- great video! I will stay with XLK and XLC long because that is where the EPS growth is. If interest rates rise, they will correct and that will be a buying opportunity. These companies get money for free anyway.

[ronpearson]

Dave, Ron Pearson from sunny Jacksonville Beach FL - trends are the most important part of trading for me. Sometimes i am too patient and end up staying too long. This is the challenge to KNOW WHEN to get in or out. Since I only trade ETFs the RRG are very helpful.

[jamesdoyle]

I'm leaning towards financials if intrest rates go up. Thanks Dave for the video.

[Whitesj]

David, I was looking for a clearer statement on entry and exit points using RRG. I realize RRG is not the sole decider but let's just say when would you consider taking action?

Entry - in the Improving Quadrant?
Hold - in the Leading?
Exit - in the weakening?

Thanks for the great content here and on "The Final Bar"

[russmcalpine]

Hi David - great info as always. In my opinion, the market is a mess and there are many factors that could swing the rotation, and has swung the rotation, over the past number of months. Frankly, I have no clue what will happen. All I know is what is happening now. I will look at the charts for support, resistance, leadership within the sectors and make my judgements. Therefore, on that basis, I will stick to what is working now, expect that it will continue until it doesn't, manage my risk and be prepared to adjust quickly.

[gsk]

/David great show. you are ficussing on yearly RRG charts whereas what stocks are perfroming in past two months have been used for what is working, . i want to know what is right. have a great week end

[atill]

Really think Energy is going to perform well next 1-3 months. Had a nice pullback and crude prices been very resilient while other commods have corrected. Also, these energy companies are very discipline now and capex has been slashed for the future so supply/demand metrics will be tight. Also, reflation names have been very correlated to rates lately and see rates continuing to go higher after going sideways most of the past 3 months

[tomasito]

Too much advertising. Can't watch. !!!!