The following is one article from my book Swing (Sector Rotation + Momentum) Trading 3rd Edition:
There are many articles on
sectors by other authors and from other sites such as Market Watch. Andrew
McElroy writes articles on sectors in SeekingAlpha.com. Search for his articles
and you will learn a lot. His recommendations may not make you money, but it
should in the long run. Learn from his ideas and his reasons behind them. I’ve not
checked his performance as they’re not relevant for learning. Here are some of
my sample notes on his articles.
·
Reflation is used
by the government to restart the business after contraction. It is arguable.
His article “An inflection point for the reflation trade” also demonstrates how
Moving Average (200 days) is used. Enter the symbol such as XME under
finviz.com and check out SMA-200%. If it is above (> 0), it is a buy in
theory.
·
From his article on CHK, Andrew stated his
reasons to buy this stock. As of 3/16/17, finviz.com showed the double top
indicator and then it plunged. The forward P/E shows 4.7 and there were a substantial
insider purchase. The company has written the asset in a massive way and it
explains the low P/E. The purchase is betting oil/gas increases above $60/$3.
·
Many sectors should rise and fall at the same
time. However, divergence occurs as gold and gold miner described in his 3/7/17
article. Usually they correlate again eventually. Consider buying the one that
has been lower.
·
Sell when it is fully valued as in his article
on Bank of America. Buy on fears and sell on greed. The hike of interest rate
would make banks more profitable. He used TLT to check for correlation.
·
A trader should learn Elliott
Wave and watch the chart more often. I bought crude oil ETF in Jan., 2016
and do not touch it until oil returns to the recent high – wishful thinking?
Traders usually do not buy at bottoms as long-term investors do.
·
Sometimes there are many other factors such as
short squeeze besides what the chart such as 200-SMA tells you. Otherwise,
there are no poor folks. Reducing manipulation by market makers, use 50-SMA
together with 200-SMA.
Articles link:
http://seekingalpha.com/author/andrew-mcelroy/articles#regular_articles--------------------
I have several books on sector rotation. Hope one of them would fulfill your need.
1. For those who are into Sector Rotation and Momentum. New book.
Click here for Swing Investing 3rd Edition (Sector Rotation + Momentum)
or enter into your browser https://www.amazon.com/dp/B06XRQ1MMS
2. Sector Rotation.
Click here or type the following
http://www.amazon.com/dp/B01BQQYZYI
3. For couch potatoes. It is simple, rewarding and requiring only 30 to 60 minutes every month. New book.
Click here for more info.
or enter into your browser: https://www.amazon.com/dp/B072L1NZVB
4. If you're not too deeply into sector rotation. Complete The Art of Investing (Kindle version has over 870 pages) is the most cost effective. It misses several chapters on sector rotation that I wrote recently.
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