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Monday, October 01, 2007

Sector Rotation in Q3

The last week in Q3 2007 was wrapped up at best with a lacklustre performance. I would expect some portfolio reshuffling at the start of Q4 as portfolio managers position themselves in the tech and retailers group for the year end. Let's recap how the sectors performed in Sep, Q3 and Q2.

Q2 Sector Performance
Q3 Sector Performance
Click chart to view better. Some observations from the charts above:

-Energy sector remained the strongest sector, though its strength has waned somewhat in Q3

-Tech, Materials, Industrial and Consumer Staples sectors have caught up in Q3 with some nice growth

-Financials and Consumer Discretionary sectors continued to remain weak.

I have actually prepared the Sep month sector performance, but am having difficulties uploading in blogger. I just want to point out that in Sep, Materials growth has shot up considerably, outperforming Energy, while Financials and Consumer Discretionary weakness see some improvement in Sep. You can go to stockcharts.com sector performance to get these charts and find out more about the sector rotation model.

Related post: Where to Get Sector Rotation Information?

Mon: ISM Index

Tue: Pending Home Sales

Wed: ISM Service

Thurs: ECB President Trichet speaks following interest rate announcement
Edit: Notable earnings: RIMM

Fri: Unemployment rate, Non-farm payroll, Fed Governor Kohn speaks about economic outlook

All eyes are on the important Unemployment Rate reading this Friday. We'll see...


Blogger Tony Chai said...

Hi SOT :

Thanks for the informative article.

.. and let's not forget that Research in Motion (RIMM) is also reporting its Q2 earnings this Thurs (4/10) after market close.

RIMM gapped up about $30.00 when it reported earnings (together with an announcement of 3 for 1 stock split) back in Jul 2007. I wonder whether it could exceed market expectation this time..

Yours Truly,

Tony Chai
My Options Trading Blog

4:25 PM  
Blogger Simply Options Trader said...

Hi Tony
Sorry for this late reply. Straight calls or puts on earnings play is pretty much toss of a coin to me as they are so many factors in play whether a stock will gap up or down or maybe not even move at all.

As I'm writing right now, RIMM after hours is abt $98.5, but it went as low as $95 when it first announced its results. We'll see tomorrow how it acts up.

9:23 AM  

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