Sector Rotation Tools

This chapter discusses sector analysis with bullish percent indexes as one of the sector rotation tools. The same bullish percent concept that is applied to the New York Stock Exchange (NYSE), over‐the‐counter (OTC), mutual fund, and international markets can be applied to sectors within the market. As the sector moves up, other institutions are alerted that the move is on, and they climb on board. Eventually, the mainstream financial media catch wind of a sector move under way and begin to write articles about how the industry has made a turnaround and should have clear sailing ahead. This draws in the individual investors just in time to catch the top. The point and figure relative strength buy and sell signals are long term in nature, lasting on average two years.