This chart shows the EW Consumer Discretionary ETF (RSPD) with the ATR Stop & Reverse (ATR-SAR) indicator (red/green) and the price-relative in the indicator window (RSPD/RSP ratio). The ATR-SAR switches when there is a 4 x ATR(22) move in either direction. RSPD broke below the ATR-SAR and this signals and outsized decline. This reverses the bullish signal from...
The EW Consumer Discretionary to Consumer Staples ratio can provide insight into the specific stocks that are driving equity outperformance. Typically, in "risk on" regimes the Discretionary sector will outperform the Staples sector. Conversely, when investors get "defensive" Staples will tend to attract a greater share. Here, we see that this Relative...
The use of Equal Weight ETFs such as Consumer Discretionary (RCD) relative to Consumer Staples (RHS) can yield meaningful clues about the underpinnings of the stock market. Presently, this RCD/RHS relative strength ratio is below the levels seen in the Q4 2018 corrective period (red line in graph). This measure, along with other signals such as an elevated VIX,...
Consumer Discretionary vs. Consumer Staples remains in "risk off" mode.
When the market melted down consumer discretionary ETFs rotated towards market cap weighted diversification. This trade targets regression towards the mean while being relatively delta neutral.
EW Discretionary vs. EW Staples reaches a new low. Indicating an increased risk off environment in stocks
The consumer discretionary (i.e. retail) sector has made a bullish MACD cross on its weekly chart. It's also above signal line on the daily chart. This suggests the sector is entering a new medium-term uptrend. Now should be a good time to buy and hold the sector.