Monitoring the Market State
Monitor the market flow of money, provide us a cue of the longer term market sentimental. Understanding if the market is fearful going into Flight-To-Safety, the mentality of risk going into a Flight-To-Quality.
The money going to & fro Bond Market takes time to move, takes time to affect (entry or exit) stock/bond market, therefore providing us a cue if the money is going into the stock market in 6-12months time, or has left the stock market.
Check bond yield historical data here.
Monitoring the performance of the market sector helps to provide a short term cue of the market sentimental, whether the market is defensive or aggressive.
The Market Sector to monitor are,
- XLF, Financials (most aggressive)
- IYW, Technology (aggressive)
- XLY, Discretionary (aggressive)
- XLB, Materials (aggressive)
- XLI, Industrials (aggressive)
- XLE, Energy (defensive)
- XLP, Staples (defensive)
- XLV, Health Care (defensive)
- IYZ, Telecommunications (defensive)
- XLU, Utilities (defensive)
Check out Trading Economics, to find out the current stage of the economics.
Check out the following,
- Consumer Expectations
- Industrial Production
- Interest Rates
- Yield Curve
to find out if the economic is in
- Full Recession
- Early Recovery
- Full Recovery
- Early Recession
from the stage of the economic, determine the money flow to the sectors
- Basic Industry