Wednesday, June 21, 2017 3:05:22 PM
Sectors Within Sectors
SPX is broken into 10 major sectors.
One theory of trading is to trade only the strongest sectors within $SPX.
A common problem of that is that those are very large sectors, and they can be broken further down into sub-sectors, and some of those sub-sectors may themselves be trading stronger than any of the major sectors including the major sector they are within.
For instance, a major S&P sector is XLF (for the financials sector). But there are a lot of different major types of financial activities so there could easily be financial sub-sectors that are easily outperforming other financial subsectors. The Nasdaq market understands this so they've created an index called Other Financials and it has the symbol $OFIN. Insurance is a financial activity, so S&P put it in XLF, but Nasdaq puts it in $INSR.
Only a few of the sub-sectors within XLF (a few days ago):
S&P Financials SPDR:
NASDAQ Other Finance:
Regional Banks ETF:
NASDAQ Insurance:
SPX is broken into 10 major sectors.
One theory of trading is to trade only the strongest sectors within $SPX.
A common problem of that is that those are very large sectors, and they can be broken further down into sub-sectors, and some of those sub-sectors may themselves be trading stronger than any of the major sectors including the major sector they are within.
For instance, a major S&P sector is XLF (for the financials sector). But there are a lot of different major types of financial activities so there could easily be financial sub-sectors that are easily outperforming other financial subsectors. The Nasdaq market understands this so they've created an index called Other Financials and it has the symbol $OFIN. Insurance is a financial activity, so S&P put it in XLF, but Nasdaq puts it in $INSR.
Only a few of the sub-sectors within XLF (a few days ago):
S&P Financials SPDR:
NASDAQ Other Finance:
Regional Banks ETF:
NASDAQ Insurance:
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