Can someone tell me what they see on an intraday basis with respect to intraday sector rotation? I see for instance industries that show up on the plus in an up market day, and then another group on a down day. When the market has another up day, I find many of the same sectors that were up on the earlier up market day. Is there a basic pattern to this?
Also I heard of intrasector rotation. I imagine this means that when profits are collected from the companies that has been leading the a sector's run up, then money may still stay will the sector by rotating into a new group of stocks that have not benefited from the run up. In this case I can see this with rotating between industries of a sector. After all, the economy will favor a group of industries in a sector which can them change to other industries which then can be seeing profit growth. But I wonder if this happens with the industries themselves. This can be supported by economics too in terms of profit growth. The companies in the best position to profit in an industry, the industry leaders, will be the first to report profits and therefore have buyers for their stock. As the economic cycle progresses and profitability of that industry continues to improve, the "secondary" companies can benefit by turning profits that attract shareholders to their stock. I have seen where money can leave an industry's leaders, move on to other industries, and then move back but into the "secondaries" that have not been receiving the market player's attention in the past.
Can someone provide for details on how money goes about "rotating" between industries and between stocks within industries? For instance, what type of industries do get the attention of traders on a down market day? What makes these industries different from those that receive the trader's attention on up days? Also, does money tend to directly move into the "secondaries", or is their usually a detour to other industries before this happens?
Bob Graham |
