Consumer staples are on a tear, surging 9.21% over the past 10 sessions and behaving more like a high-beta momentum trade than a defensive sector. Since 1954, this magnitude of strength has occurred only 23 other times after removing duplicate episodes. Most instances emerged amid bear markets, corrections, or rebounds from these declines.
Yet a few appeared near record highs, making the current setup particularly noteworthy. To isolate those episodes, the analysis requires consumer staples to register a 10-day ROC of at least 9% either in the 10 sessions leading up to an S&P 500 record high or in the 10 sessions immediately following one. The latest surge qualifies.
As the chart below shows, consumer staples last surged while the S&P 500 traded near a record high on March 21, 2000, just three sessions before the dot-com bubble peaked.
As consumer staples surged, technology moved in the opposite direction. The resulting 15.83% spread between their 10-day rates of change marked the widest divergence since the Dotcom bear market.
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