According to research by John Murphy, discussed in his book “Intermarket Analysis,“ certain sectors perform the best during different phases of the market trend.

When the market is at a bottom, Consumer Discretionary stocks are usually the first to turn higher; investors can trade this sector using the Consumer Discretionary Select Sector SPDR ETF (XLY). This upturn is generally followed by an uptick in Technology (XLK), then Industrials (XLI) and then Basic Materials (XLB). When the Energy sector (XLE) is the top performer, it is often a sign the stock market is topping out.

Buying interest then typically moves into the Staples (XLP) sector and Healthcare (XLV) as the broader market begins to decline. As the market gets weaker, Utilities (XLU) generally outperform, and finally money begins to flow into Financials (XLF)–when this occurs it is usually a sign that the broader market is close to a bottom.

This pattern provides a general outline of which sectors will perform best, and in what order. The strategy is to invest in the strongest sector ETFs, then when momentum begins to wane, exit the position and move into the sector that is showing the most potential. The order may change during any given cycle, so focus on actual sector performance and not just this historical tendency.

During a bear market it is important to remember that all the sectors may decline. Even if one sector is performing better than others, be aware that the sector ETF may still fall, resulting in losses.

Strategy 2: Seasonal

During the calendar year investors can also rotate into sectors that benefit from yearly events.

“Driving season” positively impacts the Energy industry. During the summer months more travel and driving occurs, which may lift prices at the pump and increase margins for refiners. Demand increases may help those in the Exploration and Production side of the business. To take advantage, buy the Energy Select Sector SPDR (XLE) or the SPDR Oil & Gas Exploration and Production (XOP) if the sector begins to creep up in anticipation of the driving season. Exit the sector when momentum begins to wane and the season winds down.

By that time, there are other sectors to look at. As September approaches, retailers generally see a jump in sales due to students returning to school. This sector is tradable via the SPDR S&P Retail ETF (XRT). As shopping ramps up during the Christmas season, this sector also generally sees buying interest, but to what magnitude is determined by the overall consensus of whether it will be a busy or quiet shopping season.

Overall market conditions may overshadow such tendencies. If the broader market–gauged by the S&P 500–is in decline, the relative strong performance of these sectors during these times of year may not overcome the general selling pressure. Therefore, wait for the sectors to show strength in anticipation of these points on the calendar before buying, instead of simply assuming the sector will perform well.