What Is Sector Rotation?
Markets don’t move evenly. In different regimes, capital concentrates into certain sectors. Rotation is simply the shifting of leadership—often driven by rates, inflation, earnings trends, and narrative cycles.
What to Watch on a Sector Dashboard
- Leaders vs laggards: which sectors are consistently outperforming.
- Speed of move: gradual leadership is different than violent one-day spikes.
- Breadth: is performance broad within the sector or just a few mega caps?
- Theme alignment: does the move match macro news (rates, oil, CPI)?
Practical Interpretation
- Start top-down: identify winning sector(s) first.
- Then pick liquid names: leaders inside the leading sector.
- Compare to rates: yields up can hurt long-duration growth.
- Watch reversals: leadership flips often show up first in sector performance.
Common Myths
- Myth: “The best sector today is best tomorrow.” Reality: rotation can flip fast.
- Myth: “One green day means a trend.” Reality: confirm across multiple sessions.
FAQ
How do I use this with InfoLib tools?
Use Market Overview to pick sectors, then confirm individual names with options flow, dark pools, and ticker analysis.