Sector Rotation
Definition
Sector rotation is money moving from one group of stocks to another, so that some sectors lead the market while others lag.
Detailed Explanation
It shows up as a spread between sector ETFs: energy up 2% on a day the S&P 500 is flat, for example, while technology falls. Investors usually talk about rotation over months, tied to the economic cycle. Day traders care about the short version, which can flip within days. A stock in a sector that is leading has a tailwind, because the group is drawing buyers, and a stock in a lagging sector has to fight that flow. Rotation is a reason to prefer one chart over another, and it says nothing on its own about when to enter.
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