Over the past month, investors have pulled almost $434 million from XLY while allocating $848.5 million to XLP. Said differently, for every $1 that has departed XLY, nearly $2 has gone into XLP.
Highlighting the vulnerability of the discretionary sector is that this current weakness has arrived near the start of what is usually a favorable seasonal period for the sector. In fact, XLY is historically the second-best performer among the sector SPDR ETFs in October. It has its work cut out for it if it intends to honor that reputation this year. [Best Sector ETFs for October]
XLP/XLY Ratio Chart
Chart Courtesy: J.C. Parets, Eagle Bay Capital