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John J. Murphy - Simple Sector Trading

This document outlines a presentation on simple sector trading strategies. The presentation covers various sector and market relationships including bonds and commodities typically moving in opposite directions, stocks and the US dollar often declining together, and industry groups and market indices that can lead market movements. Specific chart examples from 2002 are referenced to illustrate relative performance of sectors such as insurance, aerospace/defense, medical delivery, small vs large stocks, and gold stocks as a market hedge. The presentation aims to help traders profit by positioning in the right markets at the right times based on intermarket trends and rotations between sectors.

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Mike Ng
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825 views34 pages

John J. Murphy - Simple Sector Trading

This document outlines a presentation on simple sector trading strategies. The presentation covers various sector and market relationships including bonds and commodities typically moving in opposite directions, stocks and the US dollar often declining together, and industry groups and market indices that can lead market movements. Specific chart examples from 2002 are referenced to illustrate relative performance of sectors such as insurance, aerospace/defense, medical delivery, small vs large stocks, and gold stocks as a market hedge. The presentation aims to help traders profit by positioning in the right markets at the right times based on intermarket trends and rotations between sectors.

Uploaded by

Mike Ng
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Simple Sector Trading Strategies

Profit by being in the right markets at the right time

JOHN MURPHY

Outline:
Slide 1: INTERMARKET OVERVIEW Slide 2 - 3: Slide 4 - 5: COMMODITIES VS. BONDS COMMODITIES VS. STOCKS DOLLAR VS. STOCKS

Slide 6 - 7: BONDS VS. STOCKS Slide 8: Slide 9 - 10: STOCKS VS. GOLD Slide 11 - 12: INDUSTRY GROUPS Slide 13: MARKET SECTORS Slide 14 - 15: MARKET INDICES Slide 16: SECTOR ROTATION MODEL Slide 17-28: RECENT CHART EXAMPLES

Slide - 1

- Bonds and commodities trend in opposite directions - Commodities follow lead of stocks

Slide - 2

Slide - 3

Slide - 4

Slide - 5

- In a deflationary environment, bonds and stocks decouple - They trend in opposite directions

Slide - 6

Slide - 7

- Stocks and the dollar are falling together : bullish for gold - Stocks and gold stocks trend in opposite directions

Slide - 8

Slide - 9

Slide - 10

- Retailers lead market rallies at bottoms - Cyclical stocks lead at bottoms - Small stocks lead at bottoms

Slide - 11

Slide - 12

Slide - 13

Slide - 14

Slide - 15

Sector Rotation Model


From: Stockcharts.com Slide - 16

Fidelity Select Insurance Top Sector Fund


Friday, April 5th, 2002

Slide - 17

AeroSpace/Defense Comes in Second


Friday, April 5th, 2002

Slide - 18

Medical Delivery in Third Place


Friday, April 5th, 2002

Slide - 19

Small Stocks Doing Better Than Large


Wed, April 10th, 2002

Slide - 20

Small Value Outperforms Small Growth


Wed, April 10th, 2002

Slide - 21

Gold Stocks As A Market Hedge


Friday, April 26 th, 2002

Slide - 22

Gold Stocks Move Inversely to Market


Friday, April 26 th, 2002

Slide - 23

Russell 2000 Falls Under 50-Day Line


Friday, May 10th, 2002

Slide - 24

Small Stocks Slipping


Friday, May 10th, 2002

Slide - 25

Confessions of a Technical Analyst :


Were Really Fundamental Analysts

Slide - 26

Charting is Simple
Know UP From DOWN: UP is Good DOWN is Bad

Slide - 27

This is UP UP is Good

Slide - 28

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