loader image

The Secret Engine Behind My Alpha Rotation Strategy

by | May 13, 2022 | Stocks

Wouldn’t it be nice to have access to a trading strategy with a built-in hedge that seeks out all of the hottest and weakest sectors so you don’t have to worry about one individual stock blowing up your account? 

My Alpha Rotation strategy trades a cluster of four different exchange-traded funds every two weeks. 

For those of you who don’t know, these clusters combine individual ETFs into one position and we always trade all four of them because no one knows which one could end up being the big winner. 

But now you’re probably wondering how I pick which clusters to trade for my Alpha Rotation strategy… 

How My Alpha Rotation Strategy Picks What Cluster of ETFs to Trade 

I do have to sort through things like volatility, correlation and all of that other good stuff, but the engine behind the Alpha Rotation strategy is my Cumulative Strength Index Scan. 

I use my CSI scan as a barometer for the broader market. It helps me gauge things like the S&P 500 and Nasdaq to find the strongest sectors and stocks to trade. And once a stock gets to the upper edge of the scan, it tends to stay there for a while. 

In fact, it’s my CSI scan that tipped me off to the fact that on a one-month basis, the Energy sector isn’t leading and Communication Services isn’t lagging anymore…

My CSI scan is also signaling that the Consumer Staples sector could be taking the strongest spot over Energy. If that happens, it’ll mark the first major sector rotation we’ve seen in the past five months, or 85 trading days. 

But the point I want to make is that the cluster of ETFs in my Alpha Rotation strategy always has a hedge. 

So if the market reacts quickly, either up or down, we will be protected. 

Check out my short video above to learn more about my Alpha Rotation strategy and the ETF clusters it trades. 

Don’t forget to like and subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video, and see what other trade opportunities we’re paying close attention to! 

P.S. The Federal Reserve’s latest interest rate hike is causing the stock market to go haywire in both directions… 

And in case you haven’t already noticed, things aren’t all sunshine and rainbows anymore… 

It’s crucial for investors to learn how to navigate this new era of trading before the next rate hike in June, so I decided to put together a brief training session that goes over my plan for what’s to come next. 

I’m also giving out my No. 1 sector play for free… 

Get it here now! 

WRITTEN BY<br>Roger Scott

WRITTEN BY
Roger Scott

What to read next

99 Problems and a “Pivot” is One

99 Problems and a “Pivot” is One

A friend of mine sent me this chart about three months ago. I should probably print it and keep it in my wallet next to a photo of my daughter. Given the sheer number of questions I’ve fielded lately, I’ll probably end up showing this chart more than her picture.

read more
Everything Everywhere, Going Down, All At Once

Everything Everywhere, Going Down, All At Once

When our momentum reading went negative last week, I didn’t know that we’d have the second largest bank failure in U.S. history three days later. All I knew was that it went negative… and that we got out of the way.

read more
Trust But Verify…

Trust But Verify…

I want to talk about our version of “Trust but Verify” in the markets. Qualification is the most important part of the investing process. And this F score value strategy looks to be crushing the current market.

read more

Have any questions? Contact Our Customer Service Team