Time for a chart. Buy:Sell chart of S&P500 using SPDR S&P500 ETF (SPY) compared with Caterpillar for the last 5 years.
SPY began to outperform Caterpillar from Q1 of 2018 - i.e., before the tariffs on Steel started the whole trade war. Maybe the lag had already begun?
One more chart to compare Caterpillar with China using the iShares Large Cap China ETF (FXI). This shows the change happening much closer to the start of the China tariff story - notably some months after the steel and aluminium tariffs.
Nice, I like the FXI comparison. Another correlation that I look at is the SPY compared to XLI (SPDR Industrial ETF), which is on the verge of breaking out the range.
XLI will be a big rebound if there is progress on the trade deal. I am certainly underweight that sector, other than CAT and GE. I will have another closer look.
The Buy:Sell chart is the same - turned in Jan 2018 and long before the tariffs story.
I would want to see a lower high on this chart. BUT I have a feeling that there could be stronger trades on the constituents - e.g., HON or UTX - time to dig deeper.