Sector Rotation – Let’s review the results

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Sector rotation was something that I discussed first time here on May 27, 2007.  I talked about where money was flowing and also mentioned about 21 picks. It’s been roughly 7 weeks since then and I thought let’s review if my analysis was worthwhile and how did individual picks do.

Here is the recap:

sector-rotation.pngI was bearish on Utilities and Bullish on Energy, Industrial, Materials and selectivly bullish on transportation. Over this period of 7 wks, utilities lost -3%, Energy gained +8%, Industrial gained +4% and Materials also gained +4.5%. While S&P gained 1.0%, Dow +1.5% and Nasdaq at +4%. So the results are pretty much in line of forecast. That’s bigger picture, now let’s look at individual picks for each sector.

Overall out of 21 picks, 17 were winners with 4 gaining over 20%, 12 gaining more that 10%. only 4 pick lost the biggest loss being MDM, by -5%.

Energy– my picks were BRS (up +11%), OIH (+8%), WHQ (+4%), ENG (+20%), RIG (+15%) and DO (+13%).

Next was Industrial and here is the results of my picks FWLT (+17%), JEC (+12%), KAMN (+12%), FLR (+13%), TGI (+5%) and AH (+1.6%). Also attached is the comparison chart of all these when compared with all the 3 major markets.

Now let’s review materials– FCX (+23%), PCU (+23%), CENX (+20%), MDM (-5%) and CCJ (-3%). There were 4 other picks for selective transportation CTB (+10%), TWI(+4%),CP(+1%) and FLA(-1%). 

Here are the comparison charts (vs S&P 500, Dow and Nasdaq).

energy.png   industrial.png   materials.png 

This is not to talk about my stock picking skills but to make a point that if you follow where money is flowing, chances are you are most likely to outform the broader market (There is always a bull, you need to hunt it).

Profitable trading, OP







2 responses to “Sector Rotation – Let’s review the results”

  1. vlada Avatar

    Hi my friend,
    can I ask you which source are you using to check where money flows (to which sectors)?



  2. OptionPundit Avatar

    Dear Vlada, It is part of OP’s toolbox and under the heading “The Big Picture” from Select sector SPDRs.

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