This chart shows some extreme relative performance trends in a couple of key sectors/styles. It comes from a discussion on global equities, and in particular cyclicals vs defensives – where the price performance looks particularly stretched vs the macro fundamentals. The line is an average of the relative performance of: momentum, growth vs value, and cyclicals vs defensives (all in terms of global equities, i.e. the MSCI All Countries World Index aka ACWI). The key point is the extreme relative performance seen in this chart was hardly shaken by the global equity market correction, and now it’s even headed on to new highs. This is a sign of strength because these are parts of the market that tend to do well during an economic expansion, but the parallels to the previous cycle peaks in 2000 and 2008 are striking.