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Financial Sector Slides In Relative Performance

Published 10/28/2013, 01:27 PM
Updated 07/09/2023, 06:31 AM
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Today we're seeing financials (XLF) falling again in relative performance against the S&P 500 (SPY). I’ve discussed this relationship a couple of times in the last few months and we are seeing a test of a lower low as the financial sector continues to weaken.

Back in July we looked at the divergence that was being created in the ratio chart of XLF:SPY but I showed the trend lines that would need to be broken to confirm a shift in relative performance. In August we saw those trend lines break as the overall equity market began to outpace the financial sector. After the longer-term trend line gave way we’ve seen a continued decline in $XLF’s relative performance to $SPY over the last two and a half months.

A Lower Low
I wanted to bring this chart back up as we test the lower low made in September. I’m watching this lower low to see if financials can regain their footing or if we’re in for more bleeding.
Financial Select Sector SPDR Fund vs. S&P 500
Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter and StockTwits.

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