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Individual investor with a Top down approach. I don't believe in diversification. Spreading your chips across the table is senseless to me, when based on good old economic fundamentals only certain areas of the market are poised to benefit in certain stages of the economic cycle.
  • Sector Performance - Stock Market Cycle Indicates Shift Into Late Bull Market 0 comments
    Aug 16, 2012 2:13 AM | about stocks: SPY

    It looks like we are entering a late bull market cycle. So far this rally in the market has been lead by early bull market sectors. Housing (NYSEARCA:XHB), Technology (NYSEARCA:XLK), Consumer Discretionary (NYSEARCA:XLY), and Financials (NYSEARCA:XLF) have lead this rally so far. As evidenced by the year-to-date S&P 500 (NYSEARCA:SPY) comparison chart below. (click to enlarge)

    The late bull market sectors: Energy (NYSEARCA:XLE), Consumer Staples (NYSEARCA:XLP), HealthCare (NYSEARCA:XLV), and Utilities (NYSEARCA:XLU) have all begun to close the gap on early bull market sectors in the last 90 days. Indicating a possible shift to the late bull market. As evidenced by the chart below.(click to enlarge)

    This could also be indicative of performance chasing by fund managers in search of stocks that haven't been priced to perfection yet. Either way it looks like it is time to get defensive and to start taking money off the table as soon just about every early bull market stock chart will be approaching resistance.

    Stocks: SPY
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