Friday, October 14, 2011

Sectors and cycles

The Market Cycle precedes the Economic Cycle because investors try to anticipate economic effects. Here is how the Market and Economy relate to different sectors:

So how are the different sectors performing now?  Aren't you glad I asked? 

Energy (IE oil), basic materials, industrials  has topped and had a pull back.  That is expected at the market top (so that suggests we have seen the market top).   Consumer staples,  health care, and utilities are strong and financials are weak which suggests  the economy has/is topping and the market downturn is in progress. 

We should see technology and cyclicals  (IE consumer discretionary) start to strengthen at the market bottom.  So keep an eye on techs during earnings (GOOG was strong - but it is exceptional), but what about INTC, MSFT, CSCO, etc....

Just a different look at cycles that I thought you would find informative.

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