ETF's - obviously tend to have more muted movements than individual outperformers within that group the reason is because they represent a basket of stocks, and will thus have some middlers, some leaders, and some laggards . so, yes if you can ferret out the likely better performers, than you will beat whatever the hot sector is by playing the hottest WITHIN that sector vs. the sector as a whole otoh, the ETF/sector will have less risk in terms of individual equity risk (see: ENE CAFE etc.) since any disastrous news for ONE stock in a sector/ETF will obviously be minimally damaging compared to holding a large position IN that nasty stock you can also spread trade ETF's vs. hot stocks in that sector, etc. they are a great tool i am really excited about some of the new equal weighted ETF's when it comes to indexes, etc. i prefer index weighting to cap weighting
I'm just being honest: I've never found a system that I felt worked medium term on an ETF. Again, I know others have done it. I just think it's much tougher territory. My 2 cents...