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Sectors
How we make sense of information is what decides profits.
Every developed economy has industrial categories; this is
an economic principle. To understand
economics is not necessary. For me it is a passion. To
understand indicators is not necessary either.
To understand price fluctuations is everything.
Economic fluctuations, price fluctuations, variations above
and below the trend line or ‘mean’. Market cycles are
driven by liquidity cycles. Liquidity cycles typically lead
economic cycles. Food is an industry. Food and related sub
sectors are industry in the consumer sector. Gas and Oil is
an industry. Gas and Oil is an industry in the commodity
sector.
Dr. Schaap created the sector cycles chart to
explain an economic principle, it is posted at
www.stockmarketstore.com. Economies follow a developmental
progression that takes them from infrastructure and
technological development, to commodity based industry and
finally toward a more service based structure which is the
consumer sector. This cycle repeats itself over and over,
always has and always will. Picture the chart circular
instead of lateral if that helps you ‘see’. How does this
help us make profits? It doesn’t. It is what we do that
makes profits. We have more opportunity for profit if we
choose a candidate with more upside potential, rotating
into favor rather than out.
Dr. Schaap highlighted SWY in August. This is the food
industry, grocery stores, consumer sector. NST, PNW, FL,
DUK – utilities; YUM, WEN, CKR, DAVE
– restaurant industry in the consumer sector; KFY, UN, PG,
SON, CSTR – consumer sector. Take a look at CHD, a consumer
stock climbing up off the daily 50- day moving average.
Simple TraderDoc Methodology, 20>50>200MA and you can see
‘up’. See it and make cents.
Posted at Chart Gallery there is a link to the XLP chart,
the consumer staples ETF.
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