Morningstar Sector Signals

Everyone it seems, is aware of the fact the PrudentTrader.com has been dedicating a good deal of time to trading systems and asset allocation for members.  Although most of our research is being applied to Exchange Traded Funds (ETF) I know that many of you are, or prefer to be, stock pickers.  In this environment the ability to pick the right stocks is of utmost importance to ones performance.

There are, of course, many ways to pick stocks and many screens to find the correct stock trade or investment for you.  Probably one of the better means is with a top down approach, that is to say that a weak stock in a strong sector probably has a better chance of being pulled higher than a strong stock within a weak sector.

What I have done today is to apply but one of our trading systems (proprietary and for members only) and applied the algorithm to the Morningstar Sector Groupings.  The systems that I am running are from the long side only.  Therefore the signals will be either long or in cash.  It should of course be no surprise that in this market every sector is long,  some for a lot longer than others, though.  That of course is known as sector rotation.

If there is an interest in these signals I can probably set up a Google spreadsheet or something similar and make it available to the general public for free, but you will have to let me know if it’s of interest.  Email by clicking on Contact at the top of this page or email admin@prudenttrader.com.

My data comes from Telechart which also puts forth FreeStockCharts.com which carry the Morningstar Sectors and Industry Groups.  You may have to be a subscriber to receive them here I’m not sure but check it out.