While the broader market has generally trended lower this month, one area of slight outperformance has been the stock market newbies. As shown below, whereas the S&P 500 (SPY) has fallen 2.88% MTD, the Renaissance IPO ETF (IPO) has risen 3.5%. At the moment, the IPO ETF is actually trading overbought (>1 standard deviation above its 50-DMA) while SPY began the day in oversold territory (>1 standard deviation below its 50-DMA).
The move higher in the IPO ETF has resulted in the past year’s relative strength line versus the S&P 500 (SPY) to move back into positive territory and taking out the late June high as well. Positive readings and times when the line is trending higher indicate that IPO is outperforming the S&P 500 and vice versa for negative readings. Click here to view Bespoke’s premium membership options.