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Big View Analytics: Consumer Discretionary vs. Consumer Staples

As the Thanksgiving holiday shopping season approaches, let’s look at our Big View leading sector ETFs and the current tug-of-war between Consumer Discretionary (XLY) and Consumer Staples (XLP).

The chart displays the price spread between Consumer Discretionary (XLY) over Consumer Staples (XLP). Consumer Staples leads as the ratio price declines, as above. Staples are viewed as needs, and consumer discretionary are more discretionary purchases. The spread between these two sectors points to a rotation away from buying Teslas or luxury watches and more towards fast food, groceries, and living necessities.

When others fear the consumer sector, we see consumer staples as an opportunity to benefit from economic uncertainty while providing value.

The Energy market has been strong alongside Retail and Industrials over the last six months, as shown above. Currently, Consumer Staples and Utilities lead in the previous five trading days, indicating risk-off. The strong trend in Consumer Staples over Consumer Discretionary is demonstrated over the past five days, three months, six months, and year-to-date performance. Consumer Staples have decreased by 1.5% year to date, while Consumer Discretionary has decreased by -31.3%.

If you want to stay in tune with the primary market trends and invest only passively, following the ETF leaders on a six-month basis will be helpful. Using our Phases and five-day and three-month percentage sector changes can assist more active traders. Our analytics spot sectors and subsectors that are heating up or cooling down so that you can make informed trading decisions.

If you’re looking for a more hands-on approach to tactical trading, our Big View Research Service can help.

Rob Quinn, our Chief Strategy Consultant, can provide more information about our Big View Premium Research Service. He can also offer you a complimentary one-on-one trading consult. To find out more about Mish’s Premium trading service, click here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Read Mish’s latest article for CMC Markets, titled “What’s Next For Key Sectors After the Midterms“.

Mish explains why MarketGauge loves metals and is still patiently loading up equities on Business First AM.

Mish talks metals, rates, dollar, and which sector to buy/avoid in this appearance on UBS Trending.

See Mish talk with Charles Payne on Making Money about the Oil markets testing the limits of Fed policy, China, and what to buy in the metals.

ETF Summary

S&P 500 (SPY): 396 support and 403 resistance.Russell 2000 (IWM): 182 support and 186 resistance.Dow (DIA): 337 support and 343 resistance.Nasdaq (QQQ): 282 support and 287 resistance.KRE (Regional Banks): 60 support and 66 resistance.SMH (Semiconductors): 217 support and 225 resistance.IYT (Transportation): 223 support and 229 resistance.IBB (Biotechnology): 132 support and 137 resistance.XRT (Retail): 64 support and 68 resistance.

Keith Schneider

Chief Executive Officer

Wade Dawson

Portfolio Manager

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