Divergences between the S&P 500 and various relative price indicators continue to abound. For instance, the relative price of the Morgan Stanley Cyclical index (ticker $CYC) relative to the Dow Jones Consumer Index (ticker IYK).....
Or the relative price of the Russell 2000 small cap index versus the Russell 1000 large cap index.
The track of the Russell 2000/Russell 1000 relative price generally follows the same trend as the cyclical/non-cyclical relative price. However, there are some divergences, which I think are important. In addition, the Russell indexes are a more broad representation of the economy.
The last relative price of note is the divergence in the relative price of Barclays High Yield ETF (ticker JNK) and the UShares IBOXX Investment Grade Corporate Bond fund (ticker LQD).
First, a three year view
And a one year view
These indicators suggest to me that the risk trade is coming off.
Or the relative price of the Russell 2000 small cap index versus the Russell 1000 large cap index.
The last relative price of note is the divergence in the relative price of Barclays High Yield ETF (ticker JNK) and the UShares IBOXX Investment Grade Corporate Bond fund (ticker LQD).
First, a three year view
And a one year view
These indicators suggest to me that the risk trade is coming off.
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