The US stock market has cracks galore, beneath the surface
Several gauges of lack of health continue to be present, and others are starting to join those already looking bad.
First the XLV/SPY (Healthcare/Broad market) ratio continues to rise as casino patrons follow our weeks-ago analysis into this internal rotation. It’s a signal of risk-off behavior.
The XLP/XLY (Consumer Staples/Discretionary) ratio has also put on a spike toward risk-off as we noted in a recent update.
Joining them is the ratio of value stocks to growth stocks in another lurch toward risk-off behavior.
These items all remain in downtrends and indeed we are open to and even anticipating a year-end rally. But our best plan for that would be continued risk-off behavior in the short-term (to get rid of the FOMO cling-ons), which these charts are indicating is still in play.
