One of the characteristics of a trending stock market is sector rotation. In a bull market not all sectors are necessarily trending higher and sectors are taking leadership in turns. This means that some are bound to outperform while the others are under performing. Sector rotation is a very important fuel of a bull market. So identifying sector rotation is crucial to be successful in the stock market. The phrase past performance is not an indication of future results is something that applies here very well!
We’ve seen increased volatility in the stock market this past week. I think that the reason could have been due to a rotation and not because a major top is forming just yet. Continue reading “From tech to financials and energy?”