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 2026-08-06
Alerts — misleading strength & real weakness
Credit Breadth rising mainly because LQD fell sharply — a mechanically misleading improvement.
- Ratio +1% over 21d
- Quality score 23/100 (Denominator collapse)
- Denominator-driven (77% of the move)
Every ratio — decomposed (21-day)
| Ratio | State | Quality | Driver | Num | Den | Ratio | TF |
|---|---|---|---|---|---|---|---|
| High-Beta Breadth SPHB/SPLV | ▼ Numerator lag | 5 | denominator | 0% | +0.7% | -0.7% | aligned |
| Credit Breadth HYG/LQD | ▲ Denominator collapse | 23 | denominator | +0.2% | -0.8% | +1% | aligned |
| Ex-Mag-7 Breadth XMAG/SPY | ▼ Lagging in rally | 33 | denominator | +1.8% | +3.1% | -1.3% | mixed |
| Small-Cap Breadth IWM/SPY | ▼ Lagging in rally | 35 | denominator | +1.6% | +3.1% | -1.4% | aligned |
| S&P 500 Equal-Weight Breadth RSP/SPY | ▼ Flat | 43 | denominator | +3% | +3.1% | -0.1% | mixed |
| Nasdaq-100 Equal-Weight Breadth QQQE/QQQ | ▲ Strong leadership | 57 | numerator | +0.8% | +0.5% | +0.4% | mixed |
| Nasdaq Ex-Top-30 Breadth QNXT/QTOP | ▲ Strong leadership | 68 | numerator | +1.5% | +0.5% | +1% | mixed |
| Cyclical Breadth XLI/XLU | ▲ Absolute leadership | 31 | denominator | +2.4% | -4.4% | +7.1% | mixed |
| Ex-Tech S&P Breadth SPXT/SPY | ▼ Lagging in rally | 43 | denominator | +2.3% | +3.1% | -0.8% | aligned |
| Mid-Cap Breadth MDY/SPY | ▼ Lagging in rally | 46 | denominator | +2.7% | +3.1% | -0.4% | aligned |
| Semiconductor Leadership SMH/XLK | ▼ Absolute weakness | 56 | numerator | -3.6% | +2.2% | -5.7% | mixed |
| Consumer Risk Breadth XLY/XLP | ▲ Strong leadership | 57 | numerator | +2.4% | +0.9% | +1.6% | mixed |
| Nasdaq Ex-Tech Breadth QQXT/QQQ | ▲ Strong leadership | 64 | numerator | +2.3% | +0.5% | +1.8% | mixed |
| Small Growth Breadth IWO/IWN | ▼ Numerator lag | 13 | denominator | +0.4% | +2.8% | -2.3% | aligned |
| Nasdaq Tech vs Ex-Tech QTEC/QQXT | ▼ Absolute weakness | 16 | denominator | -0.5% | +2.3% | -2.7% | mixed |
| Large Growth vs Value IWF/IWD | ▼ Numerator lag | 24 | denominator | +1.4% | +4.5% | -2.9% | aligned |
| Micro-Cap Breadth IWC/IWM | ▼ Lagging in rally | 28 | denominator | +1% | +1.6% | -0.7% | mixed |
| AI Participation AIQ/XLK | ▼ Absolute weakness | 32 | denominator | -1% | +2.2% | -3.1% | aligned |
| Extended-Market Breadth VXF/SPY | ▼ Lagging in rally | 33 | denominator | +1.6% | +3.1% | -1.5% | aligned |
| Financial Risk Breadth KBE/XLU | ▲ Absolute leadership | 43 | denominator | +4.4% | -4.4% | +9.2% | mixed |
| Software Participation IGV/XLK | ▲ Strong leadership | 68 | numerator | +7.5% | +2.2% | +5.2% | mixed |
| Internet Participation FDN/XLK | ▲ Strong leadership | 52 | numerator | +4.6% | +2.2% | +2.4% | 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.