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Invesco S&P 500 Equal Weight Consumer Discretionary ETFInvesco S&P 500 Equal Weight Consumer Discretionary ETFInvesco S&P 500 Equal Weight Consumer Discretionary ETF

Invesco S&P 500 Equal Weight Consumer Discretionary ETF

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RSPD trade ideas

EW Consumer Discretionary ETF Triggers Outsized Decline 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 early November, which is when RSPD surged above the ATR-SAR. The indicator window shows the RSPD:RSP ratio moving below its January low, which means the EW Consumer Discretionary ETF shows relative weakness. The combination of a bearish trend signal on the chart and breakdown in the price-relative is negative for the most economically sensitive sector.
AMEX:RSPDShort
by trendinvestorpro
Bullish Regime or Cyclical Relief Rally ?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 Strength ratio is actually BELOW the levels experienced in January 2018. Early 2018 was a fairly bullish time in the stock market, and serves as a good gauge or proxy of "risk on" behavior. The "gap" observed here by $SPY performance (in red) versus the EW Consumer Sectors ratio seems to support the view that investors are not really getting overly "aggressive" here. Watch sentiment closely.
R
by jay_S_
Defensive Sectors outperformingThe 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, supports those arguing that we are in a "Risk Off" or "defensive" equity environment. Until the relationship breaks out of this zone, investors are well served to manage risk and stay nimble.
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by jay_S_