I have highlighted the prior junctures when utilities strongly outperformed the S&P 500. Each arrow in the chart is the exact same length.
For the most part, ratio tops tend to get resolved within 3-6 months, with definitive risk sentiment either turning positive (down trending) or negative (up trending) as a result.
We have gone through a substantial length of time this year where the utilities/S&P 500 ratio has stayed elevated. Realistically it can not stay at these levels for much longer given historical precedent. As such, the next three months likely will result in either a spike up in the ratio/collapse in equities or rally in equities and decline in the ratio.
What this means for investors is that likely this period of volatility will come to some kind of intermediate-term end by the end of winter. For those interested in putting money to work, every day that goes by increases the likelihood that sanity returns to markets. That would be a good thing.
This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.