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…