JOHN NYARADI is Publisher of Wall Street Sector Selector: Professional ETF Trading (www.wallstreetsectorselector.com), an online newsletter specializing in sector rotation trading techniques and exchange traded funds. He is also President of Ridgeline Media Group, LLC. Nyaradi's articles on investing have appeared in major online financial publications, including Dow Jones MarketWatch, Trading Markets, MoneyShow.com, Yahoo! Finance, InvestorsInsight.com, Fidelity.com, Seeking Alpha, ETF Daily News, iStockAnalyst, and many others. He has also appeared as a guest on the Business TalkRadio Network. Visit www.supersectors.net for a special offer from Wall Street Sector Selector and more resources and information about exchange traded funds and sector rotation.

“If you had to choose just one investment book to read this year, this could be it. … Included in “Year’s Top Investment Books” in the 2011 Stock Trader’s Almanac, Super Sectors provides useful background on ETFs, the pros/cons of each sector, basic technical tools, trading strategies, and psychology - really a masterpiece of overview of sound investing and trading with plenty to learn and review for those on all levels of expertise.—Cliff Wachtel, FXinsights.com, November 2010 “If you have considered investing by sectors using ETFs, then Super Sectors is the book for you.”—Stockerblog.com, October 2010"This book provides a highly accessible and pragmatic approach to the subject of investment vehicles. For the relative newcomer to active investing, it offers several nuggets of useful information. For veteran system developers interested in further honing their trading acumen, it serves as a refresher of key concepts."—Bruce C. Greig, Financial Analysts Journal, January 2011

• Preface xiiiAcknowledgments xviiPart I Five Wall Street Fairy Tales and Why the Conventional Wisdom is Flawed 1Chapter 1 The Bear Facts about Bear Markets 3The Bear Facts: Another Bear is Out There Waiting to Maul Your Portfolio 3Conclusion 7Chapter 2 The Fairy Tale of Buy and Hold 9Ten Years of Negative Returns 9Impact on Retirement 11The World is Changing 18Conclusion 18Chapter 3 Four More Wall Street Fairy Tales: Conventional Wisdom That Could Cost You Money 21Is Asset Allocation the Answer? 21The Fairy Tales Revealed 23Conclusion 24Part II Why Exchange Traded Funds? 27Chapter 4 History and Growth of Exchange Traded Funds 29From Zero to 836 in 19 Short Years 29Conclusion 32Chapter 5 Types of Exchange Traded Funds 33Standard Exchange Traded Funds 34Index Funds 34Market Cap and Style Funds 35Bond Funds 35Sector Exchange Traded Funds 35Global Regions and Country Specific Exchange Traded Funds 36Inverse Exchange Traded Funds 37Leveraged Exchange Traded Funds 38Actively Managed Exchange Traded Funds 41Currency Exchange Traded Funds and Exchange Traded Notes 42Conclusion 43Part III Sector Rotation: What It Is and Why It Works 45Chapter 6 Sector Rotation—The Traditional View 47There’s Always a Bull Market Somewhere 47Nine Basic Sectors 49Will This Time be Different? 50The Business Cycle Has Not Been Repealed 51Why Use Sector Rotation? 52Conclusion 52Chapter 7 The New Science of Sector Rotation 55It’s a Brave New World 55Are There Only Nine Sectors? 56The Velocity of Money and the Incredible Disappearing Investor 56Conclusion 65Part IV Trading Systems Designed to Outperform the Indexes 67Your Personality 67Your Lifestyle 68Your Goals 68Chapter 8 Almost Like Buy and Hold 69But It’s Not That Easy 71Cut Your Losses and Let Your Winners Run 72“Almost Like Buy and Hold” Trading Rules 73Conclusion 74Chapter 9 The Simple Trading System 75Conclusion 82Chapter 10 The Golden Crossover Trading System 85Conclusion 90Part V The Sector Scoring System: Trading Concepts, Challenges and Conundrums 91Chapter 11 The Five Signals for Entering a Trade 93Signal No. 1: Point and Figure Charts Buy Signals 93Signal No. 2: Point and Figure Charts: Trend and Bullish Price Objective 98Signal No. 3: Moving Average Convergence Divergence (MACD) 101Signal No. 4: Relative Strength Index (RSI) 107Signal No. 5: Relative Strength 108Conclusion 110Chapter 12 Scoring Your Trades 113Selecting What You Want to Trade 113Scoring Your Trades: The Heart of the System 114Scoring the Indicators 123Conclusion 130Chapter 13 Getting Out is Harder Than Getting In 131Selecting What You Want to Trade: The Other Side of the Coin 131Getting Out of a Trade: How, When, Where 132Risk Management and Position Size 144Exiting a Trade or “What Now?” 146Signs of Weakness 147Conclusion 150Chapter 14 The Psychology of Trading 153The Biggest Single Risk to Your Trading and Investing Success is You 153Begin at the Beginning 154Greed, Fear, and the Herd 154Three Secrets to Trading Success 156Trading and the Art of War 160The Five Essentials for Victory 161Trading With the Buddha 162What Happens When Your System Stops Working 163How to Manage Drawdowns 164Conclusion 165Part VI Super Sectors: Five ‘‘Super Sectors’’ That Could Change Your Life 167Chapter 15 Super Sector No. 1: The Rise of Asia 169A Closer Look at China 169The Story Doesn’t End with China 171How Can You Participate? 172Conclusion 173Chapter 16 Super Sector No. 2: Energy 175The Bad News about Supply 175The Bad News about Demand 176Economic, Political, and Social Impacts 177Possible Solutions 177Possible Outcomes 178How Can You Participate? 179Conclusion 180Chapter 17 Super Sector No. 3: Health Care 181The Aging Baby Boomers 181Baby Boomers and the Cost of Health Care 182Growth in National Health Care Expenditures 182Possible Solutions and Outcomes 183The Ever-Growing Medical Monster 183How Can You Participate? 184Conclusion 184Chapter 18 Super Sector No. 4: Technology 187A Connected World 187Highways in the Sky 189Emerging Technologies 190How Can You Participate? 190Conclusion 191Chapter 19 Super Sector No. 5: Financials 193The Financial Sector 193Warren Buffettology 195The Dollar and Global Currency Markets 196Interest Rates 197Precious Metals 197How Can You Participate? 198Conclusion 198Chapter 20 Ask the Experts: Insights and Advice from Today’s Top Investors, Traders and Managers 201Larry Connors 201Dr. Marc Faber 205Keith Fitz-Gerald 207Todd Harrison 211Gene Inger 214Carl Larry 216Timothy Lutts 217Tom Lydon 220John Mauldin 223Lawrence G. McMillan 224Paul Merriman 228Robert Prechter 230Jim Rogers 233Matthew Simmons 234Sam Stovall 236Cliff Wachtel 238Gabriel Wisdom and Michael Moore 241Conclusion 245Appendix ETF Resources 247Web Sites 247Exchange Traded Funds Providers 247Books 248Notes 251About the Author 253Index 255

JOHN NYARADI is Publisher of Wall Street Sector Selector: Professional ETF Trading (www.wallstreetsectorselector.com), an online newsletter specializing in sector rotation trading techniques and exchange traded funds. He is also President of Ridgeline Media Group, LLC. Nyaradi's articles on investing have appeared in major online financial publications, including Dow Jones MarketWatch, Trading Markets, MoneyShow.com, Yahoo! Finance, InvestorsInsight.com, Fidelity.com, Seeking Alpha, ETF Daily News, iStockAnalyst, and many others. He has also appeared as a guest on the Business TalkRadio Network. Visit www.supersectors.net for a special offer from Wall Street Sector Selector and more resources and information about exchange traded funds and sector rotation.

“If you had to choose just one investment book to read this year, this could be it. … Included in “Year’s Top Investment Books” in the 2011 Stock Trader’s Almanac, Super Sectors provides useful background on ETFs, the pros/cons of each sector, basic technical tools, trading strategies, and psychology - really a masterpiece of overview of sound investing and trading with plenty to learn and review for those on all levels of expertise.—Cliff Wachtel, FXinsights.com, November 2010 “If you have considered investing by sectors using ETFs, then Super Sectors is the book for you.”—Stockerblog.com, October 2010"This book provides a highly accessible and pragmatic approach to the subject of investment vehicles. For the relative newcomer to active investing, it offers several nuggets of useful information. For veteran system developers interested in further honing their trading acumen, it serves as a refresher of key concepts."—Bruce C. Greig, Financial Analysts Journal, January 2011

• Preface xiiiAcknowledgments xviiPart I Five Wall Street Fairy Tales and Why the Conventional Wisdom is Flawed 1Chapter 1 The Bear Facts about Bear Markets 3The Bear Facts: Another Bear is Out There Waiting to Maul Your Portfolio 3Conclusion 7Chapter 2 The Fairy Tale of Buy and Hold 9Ten Years of Negative Returns 9Impact on Retirement 11The World is Changing 18Conclusion 18Chapter 3 Four More Wall Street Fairy Tales: Conventional Wisdom That Could Cost You Money 21Is Asset Allocation the Answer? 21The Fairy Tales Revealed 23Conclusion 24Part II Why Exchange Traded Funds? 27Chapter 4 History and Growth of Exchange Traded Funds 29From Zero to 836 in 19 Short Years 29Conclusion 32Chapter 5 Types of Exchange Traded Funds 33Standard Exchange Traded Funds 34Index Funds 34Market Cap and Style Funds 35Bond Funds 35Sector Exchange Traded Funds 35Global Regions and Country Specific Exchange Traded Funds 36Inverse Exchange Traded Funds 37Leveraged Exchange Traded Funds 38Actively Managed Exchange Traded Funds 41Currency Exchange Traded Funds and Exchange Traded Notes 42Conclusion 43Part III Sector Rotation: What It Is and Why It Works 45Chapter 6 Sector Rotation—The Traditional View 47There’s Always a Bull Market Somewhere 47Nine Basic Sectors 49Will This Time be Different? 50The Business Cycle Has Not Been Repealed 51Why Use Sector Rotation? 52Conclusion 52Chapter 7 The New Science of Sector Rotation 55It’s a Brave New World 55Are There Only Nine Sectors? 56The Velocity of Money and the Incredible Disappearing Investor 56Conclusion 65Part IV Trading Systems Designed to Outperform the Indexes 67Your Personality 67Your Lifestyle 68Your Goals 68Chapter 8 Almost Like Buy and Hold 69But It’s Not That Easy 71Cut Your Losses and Let Your Winners Run 72“Almost Like Buy and Hold” Trading Rules 73Conclusion 74Chapter 9 The Simple Trading System 75Conclusion 82Chapter 10 The Golden Crossover Trading System 85Conclusion 90Part V The Sector Scoring System: Trading Concepts, Challenges and Conundrums 91Chapter 11 The Five Signals for Entering a Trade 93Signal No. 1: Point and Figure Charts Buy Signals 93Signal No. 2: Point and Figure Charts: Trend and Bullish Price Objective 98Signal No. 3: Moving Average Convergence Divergence (MACD) 101Signal No. 4: Relative Strength Index (RSI) 107Signal No. 5: Relative Strength 108Conclusion 110Chapter 12 Scoring Your Trades 113Selecting What You Want to Trade 113Scoring Your Trades: The Heart of the System 114Scoring the Indicators 123Conclusion 130Chapter 13 Getting Out is Harder Than Getting In 131Selecting What You Want to Trade: The Other Side of the Coin 131Getting Out of a Trade: How, When, Where 132Risk Management and Position Size 144Exiting a Trade or “What Now?” 146Signs of Weakness 147Conclusion 150Chapter 14 The Psychology of Trading 153The Biggest Single Risk to Your Trading and Investing Success is You 153Begin at the Beginning 154Greed, Fear, and the Herd 154Three Secrets to Trading Success 156Trading and the Art of War 160The Five Essentials for Victory 161Trading With the Buddha 162What Happens When Your System Stops Working 163How to Manage Drawdowns 164Conclusion 165Part VI Super Sectors: Five ‘‘Super Sectors’’ That Could Change Your Life 167Chapter 15 Super Sector No. 1: The Rise of Asia 169A Closer Look at China 169The Story Doesn’t End with China 171How Can You Participate? 172Conclusion 173Chapter 16 Super Sector No. 2: Energy 175The Bad News about Supply 175The Bad News about Demand 176Economic, Political, and Social Impacts 177Possible Solutions 177Possible Outcomes 178How Can You Participate? 179Conclusion 180Chapter 17 Super Sector No. 3: Health Care 181The Aging Baby Boomers 181Baby Boomers and the Cost of Health Care 182Growth in National Health Care Expenditures 182Possible Solutions and Outcomes 183The Ever-Growing Medical Monster 183How Can You Participate? 184Conclusion 184Chapter 18 Super Sector No. 4: Technology 187A Connected World 187Highways in the Sky 189Emerging Technologies 190How Can You Participate? 190Conclusion 191Chapter 19 Super Sector No. 5: Financials 193The Financial Sector 193Warren Buffettology 195The Dollar and Global Currency Markets 196Interest Rates 197Precious Metals 197How Can You Participate? 198Conclusion 198Chapter 20 Ask the Experts: Insights and Advice from Today’s Top Investors, Traders and Managers 201Larry Connors 201Dr. Marc Faber 205Keith Fitz-Gerald 207Todd Harrison 211Gene Inger 214Carl Larry 216Timothy Lutts 217Tom Lydon 220John Mauldin 223Lawrence G. McMillan 224Paul Merriman 228Robert Prechter 230Jim Rogers 233Matthew Simmons 234Sam Stovall 236Cliff Wachtel 238Gabriel Wisdom and Michael Moore 241Conclusion 245Appendix ETF Resources 247Web Sites 247Exchange Traded Funds Providers 247Books 248Notes 251About the Author 253Index 255