No Defense At All
Where is the defensive rotation if stocks are about to collapse?
There's no evidence in the bond market that this is true at all.
And when you keep diving into the intermarket relationships, again, you'll find little to no rotation into defensives:
In addition to tight credit spreads, you're not seeing much flow into Low Volatility stocks or Consumer Staples.
In fact, High Beta and Consumer Discretionary have held in very well.
If we're going to see a major correction in stocks, I believe you're going to start to see these ratios rolling over soon.
You haven't seen that at all.
And remember, this is a logical time in the cycle for stocks to correct. If stocks were NOT correcting, that would actually be very weird.
All of this is perfectly normal.
We discussed it all on last week's LIVE Conference Call. What are we doing about the current market? How are we taking advantage of this higher volatility and new environment?
Premium Members make sure to check it all out here and download the slides.
Let me know what you think!