XMJ vs XFJ 12 months:Not sure this sort of divergence is...

XMJ vs XFJ 12 months:



Not sure this sort of divergence is healthy. The trade exposed part of the economy is clearly struggling while market is saying that the domestic economy is just fine. Banks broke to new 12 month high today, while resource projects are being postponed or cancelled, and some existing mines and especially mineral processing operations closing.

The AUD connects the two is reflecting the relative strength of our domestic economy. Perhaps is is acting as a trailing indicator as employment and/or fiscal implications of commodity price falls are yet to be felt. I agree it is likely to have big fall at some point, but not sure about the immediate sell signal.