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Below we highlight 50-day moving average spread charts for the ten major US sectors. The blue line represents the historical daily percent difference between the current price of the sector and its 50-day moving average. The green and red lines represent extreme points over the time period shown (11/05-present). As shown, financials and consumer staples are very close to their low points over the past year and a half, while the utilities sector is close to its high point. ETFs tracking financials are IVF and VFH. ETFs tracking consumer staples are IYK and XLP. ETFs tracking utilities are UTH and IDU.
The XBD deviated by over 20% from the 50 day MA back in 2002. I suggest a longer timeframe that a year and a half, since we have been in a bull market for quite some time. With that said, the XBD has alot of room to fall. This makes fundamental sense as well, since we have an invesrted yield curve and a significant amount of bad debts in the system.
Posted by: Sammy Lucci | March 02, 2007 at 11:15 AM
agreed
Posted by: Phil | March 02, 2007 at 02:47 PM