$SPY showing signs of exhausgion against $ACWX (3/5)

Conviction: 3/5
SPY could continue to outperform ACWX for another year as in 2015-2017 period.

Main Thesis
  • Weekly RSI of SPY outperformance nearing overbought area, which have historically identified about 3 months of underperformance when SPY/ACWX touches 50W or 100W MA.
  • Monthly RSI also approaching overbought.
  • Daily RSI seems to be rolling over, but not definitive yet.
  • Relative performance also nearing historical MT channel since 2011/2012

Potential Risks
  • Historically international stocks do not seem to offer much protection during downturns. In fact, they seem to underperform SPY.
  • SPY outperformance could continue awhile longer.


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