The short energy, long consumer trade is over

For half a year now the Consumer Discretionary relative to Energy trade has worked well.  The consistent trend lower quickly became a sharp drop in November before the December climax low.

Now we've seen a false break of that climax low with a clear momentum divergence.

Looking at the relative strength of XLE and XLY we see further divergences playing out.

We can expect some pretty substantial mean reversion in this trade.  Maybe it will be more than that, but we've no way of knowing.

The biggest takeaway here is the long consumer trade was A lynchpin of the fourth quarter rally.  Now that it's ending, we're relying solely on biotech to carry the market higher.  That's tough for this sickly acting market.  

Thanks for reading!