Do you know when stocks making new 52-week relative lows is actually bullish? When we’re talking about Consumer Staples.
You see, when the market is falling apart, you’re going to see a sympathy bid, specifically on a relative basis, into Consumer Staples. In other words, no matter how bad things get, we’re still going to drink beers, smoke cigarettes, brush our teeth and wash our dishes. Those things won’t change. We call them Staples.
On the flip side, when stocks are doing well and the major indexes are in uptrends, or bull markets if you want to call them that, Staples are going to underperform. Their safer-haven status and lower beta components tend to lag during the good times.
You can see that here: [Read more…]