The sector rotation model (SRM) indicator presented in Giorgos Siligardos’ article in this issue, “Applying The Sector Rotation Model,” is a simple but effective tool to help the trader visualize these forces in action.
This indicator provides an interesting concept that perhaps could be explored further by experimenting with some of the other available indexes as proxies for the market sectors.
See Figure 15 for a sample implementation.
FIGURE 15: MICROSOFT EXCEL, SECTOR ROTATION MODEL INDICATOR. Here is a sample chart of Siligardos’ sector rotation model indicator (based on a 75-day rate of change) on the S&P 500.