Question:

Where do the industry strength and general market conditions come in?
As I’ve learned the hard way – the street can kill you
if a stock’s group is not in favor or they’re reducing their weight in the
group. And of course if the NAS is shaky the breakouts fail. The group thing
is the hardest for me to conceptualize because by the time a leading group
is ranked high it has possibly already made it’s run up and isn’t
necessarily safe to buy. [edited] is basically saying that the group stays off
the radar until it is in the top 25% or so of his 197. Maybe that’s too
late. I have written some reports in ms access (using DailyGraphs group
data) to try to catch which groups are moving up. Also, Prophetnet’s screen
is excellent but there are a ton of groups (detail overkill?). Anyway, it
seems like when the market gets hot on a group they’ll buy almost anything
halfway decent in the group. But when they decide to cycle out ya better get
off the train tracks. Don’t laugh at me but I almost think it’s all about
the groups! Look at today – Oil & Gas forever – again. Thanks for listening

My Response:

When making the decision to buy or sell a stock, first and foremost in your
mind should be "what is the health of the market?" and which industry groups
are leading?  You’ll notice the the members portal begins with the Market
Outlook page where I post articles taking a look at the market from a
technical and psychological standpoint.  The calendar there provides a look
at accumulation and distribution days.  The Market Strategy box details the
best strategy, given current market conditions.  Right now, there is
uncertainty with a bullish bias which is why I recommend being only 50%
invested in the strongest industry groups.

The next tab you come to is the Top Industries tab which displays top groups
based on 10,20 and 30 day performance.   From my experience, this table
spots new trends long before they appear in [edited].  What I do is look for
groups that appear in the 10 day performance and make a note of it.  If they
can then make the move to the 20 day performance, more often than not this
means a group is making a move.  I would focus on that group and look for
stocks breaking out.  What you’ll find is that there may be several all
setting up for a breakout at the same time.  Right now, it’s still all about
transportation (trucking, railroads), chemicals, oil and metals (copper,
gold, silver).  While some profit taking has occurred, they continue to show
up in the top performances, so you should continue to concentrate in these
areas.  To find buy candidates from leading industries, you could click on
the "show all stocks" link under the Top Industries tab which will display
all stock in the Breakout Tracker that belong to the idustries listed in the
Top Industries performance table.  To find stocks that have yet to break
out, sort by B/O Date to display stocks with no date.  Then look for high
total rank and RS rating.

Be sure to take a look at my detailed report taking a look at how I go about
finding the best performing industries/sectors (I place much emphasis
on ETF’s now)