Sector rotation is a well known and comprehensively fleshed out trading strategy. The leader/ lagger aspect is similarly well documented and understood. The main feature, in my opinion is its unlimited capacity to handle large sums of capital. 4% a week is standard for profit making and the advancing price cycle that is very effective is an average of 4 1/2 weeks. What lends reliability to any trading is the quality of the universe that is selected for trading. What makes a leader in a given sector compared to a lagger is largely based on the float of the two types of stocks in one's universe. If a person does not have the means to exclude unreliable stocks from his sector rotation universe, then using any set of sector rotation rules will turn out to be unworkable. Both EPS and RS values as divided into 100 parts cover several of the bases for selecting the laggers as tradable. Observing sector rotation is important to learn as a part of any trading focus or strategy. Some sectors are rising in promenance and some are declining. Just before stocks in a given sector take off, it is very important to have the sector in view among the important players. Most of the financials provide good information on this and using such on Excel works quite well if you want it done for you on a demand basis.
Newtothis, how do you select stocks in the group? What guidelines or criteria do you use? Do you also use the group price behavior as a sell signal? Please continue to post examples. Thanks.
cit- + BOT 1000 CHK Stock 40.860 USD ARCA 11:14:06 5.00 + SLD 1000 CHK Stock 40.980 USD NYSE 11:27:14 5.00 + BOT 1000 CHK Stock 41.690 USD NYSE 12:45:21 5.00 SLD 1000 CHK Stock 42.30 USD SMART 13:04:58 5.00 + BOT 1000 IPI Stock 37.300 USD NYSE 14:06:23 5.00 Hook- honestly i just watch the ags and I heard of chk and mee from ibd a few months ago. this was when it was sky rocketing and ibd gave it great ratings. Threw out the ibd but just kept watching the stocks I couldn't hold on to chk bec. customers keep walking in (I work in a shoe repair and watch repair shop in manhattan) I usually buy 1000 share lots I coulodn't get out of ipi bec. ib froze up on me (I noted the problem in the software forum section. by the time I shut down and restarted (and took care of customers) I was down over a grand. But I don't fret bec. oil is going up )thats one of the reasons I placed the trade) so I think I'll be ok.
your statements about sector rotation does not match your proficiency in SCT, in fact it falls far short of it. I wonder if you are aware of this or willing to admit it. Perhaps it's because sectors, and the encompassing external factors, is something that I do dwell in. I will not debate you in this, for you will just throw your Hershey language at me, which ends up leaving the appearance of superiority in the subject to your corner, as always. This was just an observation. Never the less, not only did you leave out several crucial elements for your statement to be sound, you also mentioned tactics that are far outdated.
Since this thread is for newbies and Jack Hershey has darkened your doorstep, let me warn you with my opinion of Hershey in a nutshell. I urge you to take a few minutes to read this and check out the supporting links. Jack churns out fantastic, unsupported claims that he never provides proof of, like this: http://www.elitetrader.com/vb/showthread.php?s=&postid=912447&highlight=#post912447 But in reality he LOST 24% in a trading contest and unsuccessfully tried to obfuscate his way out of it on Usenet: http://groups.google.com/group/misc...a927db8ba840?hl=en&lnk=st&q=hershey+loses+24# He also tried to BS his way out of yet more of his sinking stock picks that lost $22,000: http://groups.google.com/group/misc...d/thread/981513b3a003f259/2db2e88d1407af42?hl In Oct 06 Jack told his IBD Group (now led by someone else) that he would turn $10 thousand into $1 million in 100 days and post updates on ET. IT DIDN"T HAPPEN. http://www.mediafire.com/?1gi2qygm3yh No surprise, because if you backtest his model of the price, volume relationship by buying the "0 to 7 turn" described in "Tomorrow's Paper Today" you'll get an equity curve like this: <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2014607> Which looks eerily like the equity curve you get when you test his "rocket" methodology: <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1112121> Kind of what you'd expect from someone who thinks stochastics is a leading indicator: http://www.elitetrader.com/vb/showthread.php?s=&postid=1302778&#post1302778 Of course Jack and his followers try to blame the failure of his "methods" on the backtester, so listen to Jack brag about this trade in his own words: http://www.mediafire.com/?0ielxnmeiro <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2023032> Some unfortunate newbies who get sucked in by Jack's pied piper routine start out ingratiating and actually believe Jack is giving away the "keys to the kingdom." But this one eventually came to his own conclusion that Jack is "nuts": http://www.elitetrader.com/vb/showthread.php?s=&postid=1940582#post1940582 How far down this path do you want to go?
If you are comfortable in this style then that's what is most important. Keep doing it and become on expert. An entire trading career can come from a simple idea such as this...you just have to be good at it. You are on the right track, just keep working at it. Keep stats. Oh and stop giving advice...just focus on your own trading.