Discretionary To Make A Charge At Familiar Level Again?

One way many market participants gauge the risk on or off approach is by analyzing the ratio chart compared the discretionary space to the staples. If the staples are in favor clearly the appetite is stating the consumer is acting in a conservative manner. Below one can see how FOUR times since last August the staples have made a robust advance versus their discretionary counterparts. Has this pattern become too predictable? Will this be the time for the staples to burst on through resistance at this altitude? Peering at their charts the XLP does have a healthier look just 1% off most recent 52 week highs, while the XLY is 3% off its own yearly peak. For the last 2 weeks both of those ETFs are lower, but the XLP in a lesser nature down .4% last week and up .5% this week so far heading into Friday. Contrast that with the XLY lower by 1.6% last week and another .7% this week thus far (this was written before the AMZN blast after hours so expect a big change if it CLOSES Friday where it is now after hours up 9%). KO is a good example of staples strong behavior. It has advanced 10 of the last 11 weeks, and by another 2.1% so far this week. Who said soda is a staple anyway? Perhaps it is just so for investors that crave that delicious dividend yield. 

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