Thursday, June 2, 2011

More Risk Off

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:

SharkAnalyst said...

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....

Quick Takes Pro said...

Either way - they are equal.

No tools other than entering it into a chart. No weights. Just raw stuff.