The Fidelity Sector Funds are clustering, with all of the transport related funds rising into the top 3. This could be bad for the system, since it must hold funds for 30 days before selling.
Currently, 2/3rds of the funds the system is holding are transport related: FSAIX (Air Transportation) and FSFRX (Transportation). The 3rd fund it is holding is FSLBX (Brokerage and Investment Management).
The top 5 Fidelity Select Funds, as of tonight:
- FSAIX (Air Transportation)
- FSFRX (Transportation)
- FSAVX (Automotive)
- FSLBX (Brokerage and Investment Management)
- FSLEX (Environment and Alternative Energy)
And the bonus sector fund, especially for Le Fly since he likes the space…in 7th place behind Industrials, is FSHOX (Construction and Housing).
I’m expecting to see some sector rotation, and soon…but these trends can persist longer than we expect.
I’m assuming these are based on “strength of trend of out-performance”, or something similar; what duration are you using for comparison??
Dyer, I don’t want to say too much about it, but yes, strength of trend, and a volatility component. If you search the site you can find all the specifics. Sorry to be opaque.
Wood, thinking about it for a minute, I shouldn’t be too surprised to see 2 or 3 related funds at the top, but I don’t remember seeing it mentioned in any rotation systems before. Do you think this means unusually high risk?
Yes, I’m worried about risk here. Take a look at IYT. The system caught a lot of that large move. I just don’t want it to catch a large downside move with 2/3rds of the account invested in the transportation sector.
EGAN looks good. Where’s Woodshedder with the hight tight flags
Working on them now!
EGAN has serious liquidity concerns, but it is a pretty chart!