Sector Rotation – Spotting the Turns

This new paper might be useful to those of you following sector rotation :-

Trev
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Sector Rotation – Spotting the Turns

By Frederic Palmliden, CMT
Senior Quantitative Analyst, TradeStation Labs
[email]TSLabs@TradeStation.com[/email]

Summary

Sector rotation is based on the concept that different sectors of the equity markets perform differently during various phases of an economic cycle. Much technical and fundamental research has been conducted on intermarket analysis as the question nowadays is more where to invest than whether or not to be in the market. For instance, cyclicals may start to outperform consumer staples when the economy is experiencing an upswing reflecting improved consumer expectations and optimism about the direction of the business cycle.

While there are many approaches to monitoring sector underperformance and outperformance, this paper will focus on sector rotation using a proprietary relative strength methodology. Challenges associated with traditional relative strength analysis become apparent when several moving parts are involved, which is the case with sector rotation. This paper will discuss and address these challenges, while providing a preview of future TradeStation Labs products........................

[url]http://www.tradestation.com/education/labs/analysis-concepts/sector-rotation-spotting-the-turns[/url]

I saw that too, but a bit disappointing that they decided to keep the code proprietary.