The ratio of XLY (the consumer discretionary ETF) vs. XLP (the consumer staples ETF) is a nice little risk proxy, since investors by discretionaries when things are good, and visa versa.
As you can see, that ratio has moved down sharply.
But even more interesting — as this chart from Waverly Advisors shows — is the fact that it’s already touched an outer band of the average (specifically, a 2-standard deviation move from the 20-day average), which is an event we haven’t seen since 2008.
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