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.
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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