A chart introduced to me by colleague Boris Simonder also sports a peak in February as the copper/gold and junk/hi-grade bond ratios do (see yesterday’s blog). The offense/defense index simply compares the performance of offensive sectors (tech and cyclicals) to defensive sectors (health and staples). I’ll let you do the chart since I am short on time now – use XLY*XLK/XLP/XLV,
Anyway, it is another indicator that peaked in February, showed a solid bearish divergence in May and has been heading south ever since.
