medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
An index is churning sideways at a high level. You notice that the 'Financial' sector is showing 'Upthrusts', while the 'Energy' sector is showing 'Successful Tests' and 'Relative Strength'.
Based on 'Market Rotation' principles, what should you do?
- Buy Financials because they are 'on sale' compared to Energy.
- Rotate your capital out of Financials and into Energy.
- Short the whole Index because the Financials are the 'leaders'.
- Wait for Energy to show 'No Demand' before taking any action.
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