The ratios of Low Volatility vs the S&P 500 (SPLV / SPY) and Consumer Staples vs S&P 500 (XLP / SPY) are testing the critical former lows. While the defensive sector index broke a year-long downtrend a few weeks ago, indicating that a bullish reversal could be imminent, now may be the perfect spot for defensive stocks to start outperforming. If the ratios of SPLV / SPY and XLP / SPY rebound, US stock indexes will likely face stiff headwinds as they are overdue for corrections.
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