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Strategies & Market Trends : Technical Analysis - Beginners

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To: Michael Watkins who wrote (10579)6/7/1999 12:45:00 PM
From: Christopher  Read Replies (1) of 12039
 
Sector Investing with more details.

For those who need an introduction to Sector Investing, here it is.
It has been said that the stock market is a market of stocks. More accurately the stock market is a group of markets. There are 12 sectors that have been created by Standard and Poor company for S&P 500. Some of these sectors are: Technology, Transportation, Financial, Utility, Energy, etc. The question is when we have a bull market like now then what is going up? Is Technology sector going up or is it transportation or is it energy sector? Where is the smart money going?

Each Sector is created of several industry groups. For example, Transportation Sector is made up of four industry groups: Airline, Railroads, Trucks, Air Freight. Let us say that money is going into Transportation Sector. The next question is in which industry group is the money going? Is it Airline industry group or is it trucks or
railroads? There are about 115 Industry groups for all 12 Sectors.

Here is the general principal you need to know. Different Industry Groups will be going up and down all on their own irregardless what the DOW is doing. Each Industry Group is like its own mini stock market. However, Industry groups in the same Sector seem to go up together.

I will open the floor for questions at this time before I continue. If you have any questions so far please let me know.

Christopher
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