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Sunday, 01/06/2013 11:12:38 PM

Sunday, January 06, 2013 11:12:38 PM

Post# of 743
This theoretical model is based on Sam Stovall's S&P's Guide to Sector Rotation and states that different sectors are stronger at different points in the economic cycle. The graph above shows these relationships and the order in which the various sectors should get a boost from the economy. The Market Cycle preceeds the Economic Cycle because investors try to anticipate economic effects.


Stage: Full Recession Early Recovery Full Recovery Early Recession
Consumer Expectations: Reviving Rising Declining Falling Sharply
Industrial Production: Bottoming Out Rising Flat Falling
Interest Rates: Falling Bottoming Out Rising Rapidly Peaking
Yield Curve: Normal Normal (Steep) Flattening Out Flat/Inverted


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