By KingCAMBO
March 8th, 2002
One style of trading, and I feel it is one of the better ones, is
trading
the sector. That is, you concentrate on one group of stocks and become
an expert in them. This is especially useful to swing traders and position
traders. But it is an equally effective strategy for scalpers and those
of you who like to trade puts and calls.
The strategy is really very simple. Using the theory that a rising tide
"floats all boats" -or- that a raging Tsunami might in fact "obliterate
all boats" - knowing thy sector will always give you a finite set of
choices
to trade when a given group is in an obvious trend. This will keep you
from chasing the flavor of the day runners or tankers in a helter skelter
type fashion, and it allows you to concentrate and filter out the noise.
In the recent cannon shot rallies in both the Dow and the Nasdaq, we
saw a lot of money pouring back into the dogs, the Huka's POS.X index.
It would have been great to have those 50 right in front of your face and
concentrated soley on this sector.
Now, in getting started, as you will see from the following lists -
there are a lot of sectors to be aware of and many stocks which
comprise these sectors. Trying to watch all of these at once will give
you vertigo. So what I have done is put all my index sectors and HOLDR's
into a master sector watch list.
This master list always runs live in my Qcharts and
ErlangerQuote workspaces. I will toggle sort to see which sectors are
running hot or cold, and then bring up the sector components for which
stocks in the sector might be floating all boats, or tanking all boats.
Ok, so you get my drift. It's simple and effective. Let's lay out for
you now all the sectors that ultimately matter, and which stocks make up
the components of each sector:
*The closing prices and % net are from the close of
3/8/02. What is important here are the symbols that make up each index:
Dow Jones Indexes
HOLDRS
Nasdaq Indexes
PHLX Indexes
Other Indexes
The sector indexes are upated frequently. Be sure and check them at
least once per fiscal quarter to see what has been added and or dropped:
Dow: http://indexes.dowjones.com/jsp/index.jsp
Philly: http://www.phlx.com/products/sguide/index.html
HOLDR: http://www.amex.com/structuredeq/sp_holdrs.stm
Nasdaq: http://www.amex.com/dynamic/activityPrompt.stm
Happy Trading!
KingCAMBO
