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Introducing Sector Rank Spread

Sector Rank Spread is designed to gauge the tendency of money flow among offensive sectors. Sectors, represented by the SPDR sector ETFs, with higher fundamental ranks offer better economic value, and thus attract more money flow. Therefore, the larger the SRS, the better the chance that money will flow out of the one sector (supposedly with lower rank) and into another sector (with higher rank). If the spread is minimal, money flow would stall. So SRS is another way to measure the money flow, and the activeness of the stock market. Intuitively, high SRS indicates the market can still move up, while low SRS may prelude consolidation or correction.

Read more on Sector Rank Spread on my blog: