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Tackle Today: Sector Rotation in stocks

May 12, 2020

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Some sectors are up big while others stall

Since the beginning of May, some stocks and sectors have been extraordinarily strong while others have stalled.  When one area of the market is moving, while others are not, it is ‘Sector Rotation’. Generally, traders and investors rotate from one sector to another when they see the next wave of the economic cycle to either benefit or hurt that area of stocks.

Right now, money is rushing into Technology, Communication Services and Energy.  Conversely, the charts in Industrials, Financials, Utilities and Real Estate Investment Trusts have stalled.  This is most likely due to the view from most market participants that the lockdown has hurt some industries more directly than others, and money has continued to move into companies that are attractive while avoiding those that have big question marks.

Sector analysis, and sector rotation is an important part of the Top Down approach that we use in our analysis.  If you have not learned your step by step approach, which includes the top down approach, consider taking the 7-step guide course on our website. 

Start at the top of the markets, with Step 1: https://tackletrading.com/course/seven-step-guide-to-trading/


Chart of the Day

Sectors

Since May 1st, some sectors in the market have performed very well such as Tech, Energy and Communication Services, all up over 4% with tech up over 7% during that time.  But others have lagged, such as Industrials, Materials, Financials, Utilities and Real Estate.  When you see a move in different sectors like this, it is an indication of money rotating at the institutional level.


Video of the Day

Understanding Market Sectors

Coach Noah Davidson and TC (Tyler Craig) share a message on understanding the market sectors.


Today’s line up

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

The Coaches Show 8:30 PM EST

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Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.


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