Chart of the Day - Tuesday, December 10th, 2019

Today’s Chart of the Day was shared on Twitter by Peter Alexander (@RelativeTrend). It's a ratio chart of the Consumer Discretionary ETF, $XLY, relative to the Consumer Staples ETF, $XLP. This ratio is used to gauge the risk appetite of the broader market. When the line is going up, it means the Consumer Discretionary sector is outperforming the Consumer Staples sector and vice versa. Peter points out that the ratio isn't sending a very bullish message to the broader market right now. After making a series of lower highs over the past year, the ratio is currently on the verge of breaking down and potentially making a lower low. It's important to note that Amazon represents over 20% of $XLY. The stock's lackluster performance, as of late, is likely weighing on $XLY. However, the ratio looks even worse when you look at the equal-weight version of it using the ETFs, $RCD/$RHS. This is one technical development right now that doesn't exactly favor the bull case for Stocks.