Seeking Alpha
Long/short equity, special situations, contrarian, deep value
Profile| Send Message|
( followers)  

If XLF is the leading market indicator as it was in the October 2007 highs, then our markets are headed lower again:

  • When the market rallied from a July 23,2002 low to an October 11,2007 high, the Standard & Poor 500 index (ETF: SPY) advanced 94%, while the Financial Sector [ETF: XLF] gained 101%.
  • From the October 11, 2007 peak, 9 months later on July 7,2008, SPY declined 18% and XLF fell 44%.
  • From the October 11, 2007 peak to the decade low set on March 5, 2009, SPY declined 56% and XLF was down 81%.
  • Since the March 5, 2009 lows, SPY closed Friday (February 24, 2012) at a high of 136.93, up 99%. XLF in this same time frame is up 146%.
  • In the last 52 weeks, SPY is up 3.48%, while XLF is down 11%.

See chart below:

Return

Return

Return

Return

Return

ETF

%of SPY

7/23/02

10/11/07

vs 7/23/02

7/7/08

vs 7/23/02

3/5/09

vs.10/11/07

02/24/12

vs3/5/09

52 Week

SPY

79.95

155.47

94%

127.24

-18%

68.80

-56%

136.93

99%

3.48%

TLT

87.08*

76.33

-12%

81.43

-6%

94.26

24%

117.50

24%

27%

XLF

14.15%

15.93

32.06

101%

17.96

-44%

5.96

-81%

14.67

146%

-11%

XLE

12.26%

17.33

71.99

315%

78.57

9%

36.54

-49%

76.23

108%

-0.70%

XLB

3.61%

15.19

38.99

156%

36.58

-6%

16.86

-56%

37.55

122%

-2.39%

XLU

3.45%

12.14

35.22

190%

34.77

-1%

20.62

-41%

35.08

70%

11.09%

XLP

10.15%

15.67

25.40

62%

24.66

-3%

18.11

-28%

33.06

82%

12.38%

XLV

11.34%

19.18

33.47

74%

28.50

-15%

20.76

-38%

33.19

60%

12.64%

XLI

10.85%

16.71

37.83

126%

31.11

-18%

14.69

-61%

37.48

155%

2.63%

XLY

10.78%

19.87

35.36

78%

26.37

-25%

15.57

-56%

42.86

175%

10.75%

XLK

22.80%

12.10

25.99

114%

21.57

-17%

13.01

-50%

28.82

121%

10.22%

IAU

7.40

9.14

9.21

24%

17.28

88%

5.43%

*8/26/02


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: XLF As Market Sell Signal