The beginning of the growth of relative strength in the financia

2019年9月13日

An interesting situation unfolds in stocks of the US financial sector

a very rare reversal signal has arrived - only the 3rd (!) such signal since 2009 in the financial sector S&P 500,

this was in 2009, 2016 and now here again this week.

Relative Strength - the relative strength of the XLF financial sector ETF has broken the trend line of the weakening cycle since 2018, and just the last 1.5 years, banks have been weaker than the market and have been underestimated for a long time, and now, as we see last week, a certain rotation has gone from grwoth sectors to the most undervalued securities, including banks in the US market.

As can be seen from the graph, this happened since 2016 when the RS sector came out of decline and sharply went higher. That is, the outperfom of the sector went against the S&P 500 - a cycle of strengthening the sector against the market as a whole.

And six months after this moment, ETFs in the financial sector added + 38%, while the S&P 500 only + 11%, almost 3 times ahead of the entire market.