Monday, March 3, 2008

Sector Rotation

Sector Rotation - if you get it right you can beat the broader markets

In 2001 - 2002 the Financial stocks powered upward as the Technology stocks torpedoed.

Now in 2007 - 2008 the Financial stocks torpedo as the Material stocks power upward.

The ratio chart below clearly displays the buy-materials and sell-financial signal of late 2006

When the reversal comes we want to be there -

Best guess - April 2008

See next more on this - next blog posting

Bill Carrigan


Bobby G said...
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Bob Griffin said...

Would you be lead to assume that commodities will cycle down as the materials sector rolls out of favor? said...

It would be assumed that, that would be the case as materials are highly Correlated to commodities. Material are basicly "things" like steel, coal, iron where as commodities are also "things" that include corn, oil, soya and sugar. So as the materials sector cycles down so should commodities.

Bob Griffin said...

getting a little more technical, do you believe the extensions being seen in commodities are likely nearing completion, and would the ensuing pullback possibly be considered the first "shoulder" looking forward?