With U.S. markets giving back half of the gains made in October and international equities erasing nearly all of the move higher, investors are understandably nervous about the prospects for any kind of Santa Clause rally into the final stretch of the year.

As I wrote earlier, Italy changed market internals just enough to shift sentiment and the conditions under which rallies have the highest probability of occurring in. [Italy ETF Sends Warning]

U.S. Treasuries are certainly scared given that once again we find ourselves at panic low yields. More so than that, every rise in yields seems to be immediately sent back down fairly quickly as investors pile in and realize that, despite unprecedented policy efforts by fiscal and monetary authorities, inflation is no where to be found. If the bond market is right, what will be the stock market’s reaction be to the consumer? [Treasury ETFs Rally]

To answer this, take a look below at the price ratio of the SPDR S&P Retail Index ETF (NYSEArca: XRT) relative to the S&P 500 (NYSEArca: IVV). As a reminder, a rising price ratio means the numerator/XRT is outperforming (up more/down less) the denominator. Focus less on the actual ratio itself and more on the underlying trend.