MUST READ: Sector Rotation Bulletin

As tech moons, we check on the next set of accumulation opportunities.

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Rotation As Of Friday 17 November

If you missed it, first read this note where we introduce the ETF sector rotation strategy here in our Inner Circle service.

Around this time last year, and indeed through to around the end of Q1 2023, we were yelling from the rooftops that tech stocks were under institutional accumulation and would, we believe, break to the upside. We posted note after note to this effect. Here's one of many examples that we published in the public domain.

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And another:

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There were a lot more of these in our subscription services.

We reached this view because (1) our single-stock work said so; company fundamentals were nowhere near as bad as sentiment, and single-stock charts looked to be exhibiting sideways-action-at-the-lows, a telltale sign of accumulation. And also, of equal importance, because (2) our ETF sector rotation analysis said that $XLK (tech), $XLC (comm services, think Meta Platforms and Netflix), and $XLY (consumer discretionary, think Amazon and Tesla) were also trending sideways at the lows and were woefully out of fashion. So, said we, XLK and XLC and XLY were the ETFs to load up on for a breakout play, and tech stocks were the places to put capital to work as the bear fought its last.

The nature of our business means we are wrong often; the success of our business is in no small part a result of our being right often. Calling 'buy' in XLK XLC XLY and a wall of single-stock tech names a year ago turned out to be a righteous call.

Well done us. But now what?

Well, now we look at what looks now as tech and comm services and consumer discretionary looked a year ago. And we look to see which stinkers, the things nobody on FinTwit wants to buy but which the volume profile says a lot of people on Wall Street are buying, ought now to be accumulated.

Before we do that, let's check in on the two ETFs we thought worth accumulating from early October - they were Utilities ($XLU) and Real Estate ($XLRE) - see the note here.

Not too shabby.

Let's see where we stand with opportunities right now. Read on!