as you all know, I watch the XLP/NYSE Index ratio for key inflection points .. when the ratio goes UP then “staples” (think risk off) have more relative strength and when the ratio goes DOWN then the overall market (think risk on) is stronger from a relative strength perspective
with the recent market action … one would think the ratio would have exploded higher .. well, yeah, no – it hasn’t. still stuck in the range it’s been trading since FEB 2021.
so, for those max BEARS you might want to watch this .. need an upside break out above the red line to get the party started and for the max BULLS need it to break down below the green line …
no idea which way it will go BUT I will tell you I was surprised when I took a peak at it during my nightly cruising of the charts … my “thinking” was that it would have been higher, much higer.
but we trade what we SEE not what we think … so, until the ratio closes above the red line I’m going to say this sell off is a much needed correction that will ultimately need to be bought … and if we break BELOW the green line, then, perhaps game on for another run.
tricky folks .. not going to tell you it isn’t.