jangseohee

What would happen when XLY/XLP low is taken out?

XLY/XLP  
XLY/XLP  
1798 24 16
A brief recap:

XLY             is consumer discretionary sector = investor shift to luxury but not necessary things = risk appetite increase
XLP             is consumer staples             sector = investor shift to more basic needs = risk appetite decrease (more security)

As a recent spat of rally, i have noticed that there is a sector rotation play into XLP             . As a result, the ratio XLY/XLP is getting slightly smaller.

As observed from the previous two market top in 2008 and 2011, when the XLY/XLP major low (blue) was taken out on the downside, SPX             (a representative of DJIA             , DJTA, RUT & COMP) had either a major crash or correction.

XLY/XLP made another low back in Mid Oct             2014. Could the same scenario happen to SPX             again if the red line crosses below the Mid Oct             2014 low?

P.S. Excluding 2011, when SPX             kept on making higher high, XLY/XLP was making higher low. A divergence in the warning.
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If you move the chart to start from 2012-06-03 the picture is way different.
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@2use, show me ^_^
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No doubt central bankers are manipulating major indices like small caps and SP500, but they do not have the resources to manipulate all stocks or ETFs. And thus we see things that do not add up. IMHO, market internals are more important.
+1 Reply
jangseohee CosmicDust
@CosmicDust,
i often hear people talk about FUNDAMENTAL and yet they cant see macro fundamental from the chart, which is pretty sad for me, so i reckon this overall trend does tell us about the current underlying situation which is oblivious to the street yet..
Next i also have another chart in HG1! saying that once silver/gold ratio breaks upside, Commodities inflation is in full swing
my local commodities related stocks have been on a 45degree angle up,

the next commodities superstars will be Copper, Rough Rice, Coffee which i just announced in Agriculture chat room ^_^
+1 Reply
CosmicDust jangseohee
Congrats and agree. I watch TIP as an indicator - it broken out last month and this month it pulls back some. So far, yes inflation case still holds, but not sure how long it can hold.
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jangseohee CosmicDust
TIP vs TLT?
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ShPro jangseohee
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Great Observation Jangseohee !!
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