Kinks in the Armor

by: Bill Zimmer Wednesday, September 9th, 2009 at 10:44 am

Yesterday we went over the Morningstar Sectors with one of the PrudentTrader’s trading systems.  Noted — all 31 sectors are long for various periods of time.  Quite a few have been long from March and April of this year. A few have been whipsawed once or twice. Of course whipsaws are an integral part of any trading system and one of the primary reasons I harp on diversification as strongly as I believe I do.

While all the Morningstar sectors remain on a buy signal,  some of the industry groups which comprise those sectors have moved to the sidelines:

Picture 1

Are these temporary kinks in the armor? Or will they lead to something more serious? Are you invested in any of these groups? If so do you have an exit strategy in place?

Food for thought!