One of the main points in my prediction for a melt-up in stocks this fall was the lack of a catalyst or trigger. [Fall Melt-Up Arrives]

What I mean by this is that markets internally have behaved like a Lehman-like event has already happened, when in reality it has not.

Looking at the price ratios of defensive sectors (utilities, healthcare, and consumer staples) relative to the S&P 500 clearly shows that we hit levels not seen since the credit seize-up post 2008 crash, even though there has been no such situation (yet).

With Italy now looking vulnerable once again in the credit markets, I wanted to put a spotlight on the relative performance of iShares MSCI Italy (NYSEArca: EWI) versus SPDR Dow Jones Industrial Average (NYSEArca: DIA). As a reminder, a rising price ratio means the numerator/EWI is outperforming (up more/down less) the denominator/DIA.