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.
COVID-19 resulted in Online Retail ETFs reaching new all-time highs on a relative & absolute basis. Online Retail/SPY has been known to move similarly to CD/CS. We've seen CD/CS break diagonal resistance, but remains below its June 2018 ATH. EW CD/ EW CS is still heavily lagging and well below its June 2018 high
EW Discretionary vs. EW Staples reaches a new low. Indicating an increased risk off environment in stocks