Sector rotation Cyclical to Defensive

(AMEX:XLK+AMEX:XLI+AMEX:XLB)/(AMEX:XLP+AMEX:XLU+AMEX:XLV)1W

(XLK+XLI+XLB)/(XLP+XLU+XLV)Arca

Description

⋅ Jun 8, 2019 1:58 PM

I heard some interesting commentary this week from the pros about watching for signs in the cyclical:defensive sector ratio.

I put together this chart using (XLK+XLI+XLB)/(XLP+XLU+XLV).

It is a composite of tech, industrials and materials indexes as a ratio to staples, utils and health sector indexes.

The chart ratio is about 1:1 right now.

In a late stage economy if earnings expectations plunge in the cyclicals the chart ratio should show the capital rotation into the defensive sectors.

Worth watching for a signal!

Comments

rudyae86

⋅ Apr 1, 2020 5:59 PM

I am confused by this. What information does this chart give us in regards to our current market situation?

FaisalMahboobe3

⋅ Apr 1, 2020 11:57 AM

Good call!

D9thousand

⋅ Oct 30, 2019 5:24 AM

I like what you came up with here. I use TOS platform, how did you create the study? Thanks. Darrel

inderjeet05

⋅ Jun 8, 2019 3:06 PM

Next 1-2 weeks are really important especially since transports have not really moved all that much comparatively given the recent runup we have had!!!