The market staged a massive break out since October 2019. The main three market indices — S&P500, Nasdaq and Dow Jones — have been rising for the last several months reaching new all time highs on a consistent basis. Yet, a lot of sector ETFs failed to reach pre-2018 correction highs forming bearish divergence between these sectors and S&P500.
Before reviewing divergences between S&P500 and individual sectors / markets, let us review the multi-months bearish divergence between S&P500 and VIX: while S&P500 continued moving higher, the VIX has not been confirming this move with its lower lows (see chart below).
SPX and VIX, Monthly
Here are the sectors / markets that diverged from S&P500. Some have been diverging for many years while others diverged just recently.
Metals
SPX and XME, Monthly
Energy
SPX and XLE, Monthly
Emerging Markets
SPX and EEM, Monthly
Small Caps
SPX and IWM, Monthly
Healthcare
SPX and XBI, Monthly
Retail
SPX and XRT, Monthly
Industrials
SPX and XLB, Monthly
