Trend Signal Now: New All-time Lows For Defensives

Friday, January 10, 2025

Sector rotation continues to be a major driving factor in this market.

We talked about it earlier this week in our LIVE Strategy Session.

While some sectors and industry groups have been taking a breather, after these historic runs, other stocks have been catching a bid - things like Medical Equipment, Airlines and now Energy stocks.

The one constant, however, is the rotation OUT of Consumer Staples.

This defensive sector consistently outperforms when stocks are under pressure, and when it's a less than ideal environment to be putting risk on in equities.

This is the opposite of that.

Look at the new all-time lows for Consumer Staples relative to the S&P500:

And while Consumer Staples tend to underperform in healthy environments, it's the Consumer Discretionary stocks that outperform the broader markets during the good times.

And that's what we have here as Consumer Discretionary, on an equally-weighted basis, just closed the week at the highest levels relative to Staples in American history.

I don't take that lightly. Do you?

We've seen it before: the market gets distracted by some sectors getting rotated out of, while the real action is happening somewhere else.

Right now, that "somewhere else" is in Consumer Discretionary.

Retailers, restaurants, and consumer-facing companies have been on a wild ride, and the numbers don't lie. The Consumer Discretionary sector soared 27% last year, riding high on a massive rebound.

But the real opportunities are just starting to unfold.

Jeff Macke has been tracking these moves closely, and he's put together a FREE report that digs deep into what's driving retail stocks.

Jeff breaks down the companies that are poised for big things, and those that might not weather the storm. From the post-COVID bounce to the latest shifts in consumer behavior, this is the intel you need to confidently navigate the retail space.

Retail stocks are like a window into the heart of the American economy. And understanding these patterns gives you a serious edge in the market.

Gain a fresh perspective on retail stocks — click here to grab Jeff Macke's Free Retail Stock Report and uncover the opportunities others are missing.

Let me know what you think!

- JC

JC Parets, CMT | Founder, All Star Charts

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