What Consumer Stocks Are Saying About The State Of The Stock Market Rally

A very good, bullish observation from Waverly Advisors on a “trusty” market indicator suggesting ongoing market strength.

“Historically, the Discretionary/Staples spread has rallied  with the broad market; in other words, it is not a leading indicator on rallies. However, it has also historically faltered before major indexes, making it a useful timing indicator and an early warning of trend failure. we see no weakness in this spread at this time.”

Note that the Orange line represents 20 period average of the spread. Outer bands set at +/- 2.5 standard deviations.

Click to enlarge

chart

Photo: Waverly Advsors


NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.