Market X-Ray · Toolbox 3
Ratio-Quality Decomposition
A rising ratio is ambiguous. IWM/SPY can rise because small-caps led — or because the S&P fell. This decomposes every structural ratio into what the numerator did versus the denominator, and scores how meaningful the move is: numerator-driven and consistent across horizons = high quality; denominator-driven or one-horizon = low quality, mechanically misleading. Quality is reliability, not direction.
Updated daily · data as of 2026-06-05
Alerts — misleading strength & real weakness
Financial Risk Breadth rising mainly because XLU fell sharply — a mechanically misleading improvement.
- Ratio +2.1% over 21d
- Quality score 21/100 (Denominator collapse)
- Denominator-driven (76% of the move)
Consumer Risk Breadth falling on XLY weakness — XLY dropping faster than XLP, a high-quality warning.
- Ratio -3.3% over 21d
- Quality score 72/100 (numerator-driven)
- Single-horizon
Micro-Cap Breadth falling on IWC weakness — IWC dropping faster than IWM, a high-quality warning.
- Ratio -2% over 21d
- Quality score 68/100 (numerator-driven)
- Confirmed across 1d/21d/63d
Small Growth Breadth falling on IWO weakness — IWO dropping faster than IWN, a high-quality warning.
- Ratio -0.6% over 21d
- Quality score 51/100 (numerator-driven)
- Single-horizon
Every ratio — decomposed (21-day)
| Ratio | State | Quality | Driver | Num | Den | Ratio | TF |
|---|---|---|---|---|---|---|---|
| Credit Breadth HYG/LQD | ▲ Flat | 42 | denominator | -0.4% | -0.6% | +0.2% | aligned |
| Nasdaq-100 Equal-Weight Breadth QQQE/QQQ | ▲ Strong leadership | 62 | numerator | +3.2% | +1.3% | +1.9% | mixed |
| S&P 500 Equal-Weight Breadth RSP/SPY | ▲ Strong leadership | 65 | numerator | +1.5% | +0.5% | +0.9% | mixed |
| Ex-Mag-7 Breadth XMAG/SPY | ▲ Strong leadership | 69 | numerator | +1.8% | +0.5% | +1.3% | mixed |
| Small-Cap Breadth IWM/SPY | ▼ Absolute weakness | 69 | numerator | -1.8% | +0.5% | -2.3% | mixed |
| High-Beta Breadth SPHB/SPLV | ▲ Strong leadership | 72 | numerator | +1.7% | +0.4% | +1.3% | mixed |
| Nasdaq Ex-Top-30 Breadth QNXT/QTOP | ▲ Strong leadership | 82 | numerator | +5% | +0.4% | +4.6% | mixed |
| Cyclical Breadth XLI/XLU | ▲ Defensive improvement | 30 | denominator | -1.5% | -3% | +1.5% | mixed |
| Nasdaq Ex-Tech Breadth QQXT/QQQ | ▼ Absolute weakness | 33 | denominator | -0.8% | +1.3% | -2.1% | mixed |
| Semiconductor Leadership SMH/XLK | ▼ Lagging in rally | 33 | denominator | +3.6% | +6% | -2.3% | mixed |
| Mid-Cap Breadth MDY/SPY | ▼ Absolute weakness | 57 | numerator | -0.9% | +0.5% | -1.4% | mixed |
| Ex-Tech S&P Breadth SPXT/SPY | ▼ Absolute weakness | 67 | numerator | -1.5% | +0.5% | -2% | mixed |
| Consumer Risk Breadth XLY/XLP | ▼ Strong deterioration | 72 | numerator | -4.2% | -0.9% | -3.3% | mixed |
| Large Growth vs Value IWF/IWD | ▼ Numerator lag | 18 | denominator | +0.2% | +0.8% | -0.6% | mixed |
| Financial Risk Breadth KBE/XLU | ▲ Denominator collapse | 21 | denominator | -0.9% | -3% | +2.1% | mixed |
| Extended-Market Breadth VXF/SPY | ▼ Numerator lag | 24 | denominator | -0.2% | +0.5% | -0.7% | mixed |
| AI Participation AIQ/XLK | ▼ Lagging in rally | 38 | denominator | +3.7% | +6% | -2.2% | aligned |
| Small Growth Breadth IWO/IWN | ▼ Strong deterioration | 51 | numerator | -2.1% | -1.6% | -0.6% | mixed |
| Software Participation IGV/XLK | ▲ Strong leadership | 53 | numerator | +9.1% | +6% | +2.9% | mixed |
| Micro-Cap Breadth IWC/IWM | ▼ Strong deterioration | 68 | numerator | -3.8% | -1.8% | -2% | aligned |
| Nasdaq Tech vs Ex-Tech QTEC/QQXT | ▲ Absolute leadership | 79 | numerator | +7.1% | -0.8% | +7.9% | mixed |
| Internet Participation FDN/XLK | ▼ Numerator lag | 21 | denominator | +1.8% | +6% | -4% | mixed |
How to read it
Using log returns, ratio return = numerator return − denominator return, so each leg's contribution is exact. The quality score is the numerator's share of the move scaled by how consistently the ratio points the same way across 1, 21 and 63 days — high when the asset we track is genuinely the story, low when the move is a denominator artifact. Misleading strength = a ratio rising on a denominator collapse; real weakness = a ratio falling because the numerator itself is deteriorating, confirmed across horizons.
For information and discussion only — a reading of market internals, not investment advice. Thresholds are uncalibrated pending the planned backtest. Pairs with Breadth-of-Breadth and the Beta-Instability X-Ray.