A chart introduced to me by colleague Boris Simonder also sports a peak in February as the copper/gold and junk/hi-grade bond ratios do (see yesterday's blog). The offense/defense index simply compares the performance of offensive sectors (tech and cyclicals) to defensive sectors (health and staples). I'll let you do the chart since I am short on time now - use XLY*XLK/XLP/XLV,
Anyway, it is another indicator that peaked in February, showed a solid bearish divergence in May and has been heading south ever since.
2 comments:
would that be (XLY*XLK)/(XLP*XLV) instead of XLY*XLK/XLP/XLV?
what tool(s) do you use to construct these composite ratios?
thanks....
Either way - they are equal.
No tools other than entering it into a chart. No weights. Just raw stuff.
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