In the top chart, I have 5 Sectors charted with their VWAP (Staples - XLP, Financial - XLF, Technology - XLK, Energy - XLE and Discretionary - XLY). When the Sector is above its VWAP, the bar is painted Green, and Red when they are below their VWAP.
The two charts above are Friday's activity. Just before 1100 ET, Energy led the rest of the market to bullish territory. An up move by the broader market is still iffy since 4 out of 5 sectors are in the red. Just after 1130 ET, the Financials join Energy to the plus side. For any chance of a bullish move, you definitely want these two in the Green (XLF and XLE). However, this is still an iffy bull move.
After Noon ET, Discretionary Stocks also turn Green, which now gives us a majority in Sector Greens. Any corrections to the downside now has a higher probability of a successful long entry. After 1400 ET, Staples join the Green camp, which gives us a good probability that a long position will be profitable.
The above two charts for 05/07/09 shows a market where the majority of Sectors are in the Red. The Staples Sector was the only relatively bullish Sector. However, after 1300 ET, the Staples Sector also turned Red giving a short position a good probability of being profitable.
The above two charts for 05/04/09 show a market with the majority of Sectors in the Green. We had a slight correction after Noon ET, but just after 1230 ET, all Sectors turned Green again giving a long position an excellent chance of being profitable.
Another example of a bear market on 04/20/09. Again a slight bull correction at lunch with Technologies turning Green for a short period of time, but just after 1300 ET, all Sectors turn Red again giving a short position an excellent chance of being profitable.
Charles
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