With IPOs at 10-Year High and Market at New Record, It’s Still Not “Risk On” – All Star Charts

 

With the expected pricing of Uber next week, U.S. IPO issuance will be at the highest level since 2008. Volatility is also depressed, with the VIX on a steady downtrend. That, combined with the S&P 500 reaching a new record, might suggest a “risk on” environment. But at least one technical indicator tells a different story: Consider the ratio between consumer discretionary and consumer staples, as highlighted in All Star Charts Institutional’s Top 10 Charts of the Week.

“Near-Term gauges of risk appetite like the ratio of Consumer Discretionary vs Consumer Staples continue to chop around and remain rangebound after attempting to break higher earlier in the month,” All Star Charts Institutional wrote in a note. “We’re watching this relationship and others like High Beta vs Low Volatility, the S&P 500 vs Utilities and Staples, etc. for confirmation of a more risk-on environment for Equities. So far, the evidence has been mixed at best.”

Read the full Top 10 Charts of the Week here. For information about how to subscribe and receive the charts every Wednesday, two days before they are published on IPO Edge, contact All Start Charts Institutional Sales.