Markets of 2014

In some ways, 2014 was an odd year.

Even though the broad market ended better than 10% higher, things were decidedly choppier and more volatile than in 2013. We saw a wider dispersion between top- and bottom-performing sectors. And, interestingly, there was a changing of the guard with respect to the top-performers of 2013 and 2014.

By and large, there was very little correlation between 2013’s sector trends and 2014’s.

Here’s a chart that shows this…

Image Graph 2014

See larger image

Each sector’s performance — relative to the S&P 500 — is plotted, for both 2013 (green bars) and 2014 (blue bars). And the chart is sorted based on 2013 performance.

As you can see, there’s not much of a patternrn here. Here are a few examples…

• Negative Reversals: The Consumer Discretionary (XLY) and Industrials (XLI) sectors outperformed in 2013, but underperformed in 2014.

• Positive Reversals: The Utilities (XLU), Technology (XLK) and Consumer Staples (XLP) sectors underperformed in 2013, but outperformed in 2014.

• Positive Trends: The Health Care (XLV) and Financials (XLF) sectors outperformed in 2013… and that outperformance continued on through 2014.

• Negative Trends: The Materials (XLB) and Energy (XLE) sectors underperformed in 2013… and they continued to underperform in 2014.

In a sense, the lack of correlation between sector performance in 2013 and 2014 shows the difficulty in a buy-and-hold strategy.

And it shows why I recommend Cycle 9 Alert subscribers to hold their positions for two to three months at a time.

• On medium-term “swing” trades, there were good gains to be made in each and every sector.

• By buying bullish call options on a popular health care ETF, we captured a net gain of 74% between January and March.

• We made a bullish play on a utility sector stock between mid-March and early-June… and that trade handed us a net gain of 54%.

And a bullish play on the financial sector netted us 84% between August and early December.

All told, Cycle 9 Alert is a great place to learnrn which sectors are moving up… and which are headed down. And, of course, I give specific instructions on which plays to make… and how to position yourself to capture double-digit returnrns in just two to three months.






Adam O’Dell

Using his perfect blend of technical and fundamental analysis, Adam uncovers investment opportunities that return the maximum profit with minimum risk.