The state of the economy can be gauged by the performance of the different sectors of the economy or better different sectors perform differently as per the phase of economy
The above theory calls for the sector rotation between different sectors. More can be read Details in the book here.
The below chart shows the sectoral performance of the different sectors of US spider ETF for the last 4 months.
The sector which have outperformed are Energy, Metals, Consumer Discretionary, Industrial, Tech.
While the sectors which are down are Healthcare, Utilities and Financials.
The out performance of Energy, Materials, Cons Disc, Industrails suggests that there is demand of goods which is now showing in GDP growth of US.
The Utilities and Healthcare are generally regarded as defensive so they underperform in bullish Markets.
The only outlier in Financial sector which is underperformer even in the decreasing interest rate scenario.
One explanation for this can be the -ive news of the mortgage front coupled with the Euro crisis which shows more of bad loans in the system.
I will put a similar sectoral analysis like this of Indian Markets also.
The above theory calls for the sector rotation between different sectors. More can be read Details in the book here.
The below chart shows the sectoral performance of the different sectors of US spider ETF for the last 4 months.
The sector which have outperformed are Energy, Metals, Consumer Discretionary, Industrial, Tech.
While the sectors which are down are Healthcare, Utilities and Financials.
The out performance of Energy, Materials, Cons Disc, Industrails suggests that there is demand of goods which is now showing in GDP growth of US.
The Utilities and Healthcare are generally regarded as defensive so they underperform in bullish Markets.
The only outlier in Financial sector which is underperformer even in the decreasing interest rate scenario.
One explanation for this can be the -ive news of the mortgage front coupled with the Euro crisis which shows more of bad loans in the system.
I will put a similar sectoral analysis like this of Indian Markets also.
Maybe the sectoral rotation is already in place currently in the Indian equity markets. In the last 2 sessions Nifty went down by a mere 0.3%. The sectoral allcoation can really genreate some trading ideas in an otherwise lacklusture market. Is the fall in CBOE US VIX a precursor to dull sessions haead. If that be case, yes, looking forward to the sector bets from your side. RK.
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