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 2026-06-26
Alerts — misleading strength & real weakness
Nasdaq Ex-Tech Breadth rising mainly because QQQ fell sharply — a mechanically misleading improvement.
- Ratio +2.6% over 21d
- Quality score 13/100 (Denominator collapse)
- Denominator-driven (85% of the move)
Ex-Tech S&P Breadth rising mainly because SPY fell sharply — a mechanically misleading improvement.
- Ratio +1.9% over 21d
- Quality score 21/100 (Denominator collapse)
- Denominator-driven (77% of the move)
Software Participation falling on IGV weakness — IGV dropping faster than XLK, a high-quality warning.
- Ratio -3.6% over 21d
- Quality score 67/100 (numerator-driven)
- Single-horizon
Internet Participation falling on FDN weakness — FDN dropping faster than XLK, a high-quality warning.
- Ratio -4.2% over 21d
- Quality score 69/100 (numerator-driven)
- Single-horizon
AI Participation falling on AIQ weakness — AIQ dropping faster than XLK, a high-quality warning.
- Ratio -1.3% over 21d
- Quality score 57/100 (numerator-driven)
- Single-horizon
Every ratio — decomposed (21-day)
| Ratio | State | Quality | Driver | Num | Den | Ratio | TF |
|---|---|---|---|---|---|---|---|
| Credit Breadth HYG/LQD | ▼ Numerator lag | 13 | denominator | +0.1% | +0.9% | -0.8% | aligned |
| Nasdaq Ex-Top-30 Breadth QNXT/QTOP | ▲ Absolute leadership | 22 | denominator | +1.6% | -4.8% | +6.7% | mixed |
| Nasdaq-100 Equal-Weight Breadth QQQE/QQQ | ▲ Absolute leadership | 26 | denominator | +1.3% | -3% | +4.5% | mixed |
| S&P 500 Equal-Weight Breadth RSP/SPY | ▲ Absolute leadership | 33 | denominator | +1.8% | -2.6% | +4.5% | mixed |
| High-Beta Breadth SPHB/SPLV | ▼ Flat | 43 | denominator | +3% | +3.2% | -0.2% | mixed |
| Ex-Mag-7 Breadth XMAG/SPY | ▲ Absolute leadership | 54 | numerator | +3.2% | -2.6% | +5.9% | aligned |
| Small-Cap Breadth IWM/SPY | ▲ Absolute leadership | 57 | numerator | +3.5% | -2.6% | +6.3% | aligned |
| Nasdaq Ex-Tech Breadth QQXT/QQQ | ▲ Denominator collapse | 13 | denominator | -0.5% | -3% | +2.6% | mixed |
| Ex-Tech S&P Breadth SPXT/SPY | ▲ Denominator collapse | 21 | denominator | -0.8% | -2.6% | +1.9% | mixed |
| Mid-Cap Breadth MDY/SPY | ▲ Absolute leadership | 50 | numerator | +2.7% | -2.6% | +5.5% | aligned |
| Cyclical Breadth XLI/XLU | ▲ Strong leadership | 51 | numerator | +4.2% | +3% | +1.2% | mixed |
| Semiconductor Leadership SMH/XLK | ▲ Absolute leadership | 54 | numerator | +2.7% | -1.7% | +4.5% | mixed |
| Consumer Risk Breadth XLY/XLP | ▼ Absolute weakness | 72 | numerator | -5.7% | +0.9% | -6.5% | mixed |
| Micro-Cap Breadth IWC/IWM | ▼ Lagging in rally | 27 | denominator | +1.8% | +3.5% | -1.6% | mixed |
| Small Growth Breadth IWO/IWN | ▼ Lagging in rally | 36 | denominator | +2.3% | +3.4% | -1.1% | mixed |
| Extended-Market Breadth VXF/SPY | ▲ Absolute leadership | 57 | numerator | +3.6% | -2.6% | +6.3% | aligned |
| AI Participation AIQ/XLK | ▼ Strong deterioration | 57 | numerator | -3% | -1.7% | -1.3% | mixed |
| Large Growth vs Value IWF/IWD | ▼ Absolute weakness | 62 | numerator | -5.2% | +2.4% | -7.4% | mixed |
| Financial Risk Breadth KBE/XLU | ▲ Strong leadership | 64 | numerator | +8.2% | +3% | +5% | mixed |
| Software Participation IGV/XLK | ▼ Strong deterioration | 67 | numerator | -5.2% | -1.7% | -3.6% | mixed |
| Nasdaq Tech vs Ex-Tech QTEC/QQXT | ▲ Absolute leadership | 72 | numerator | +2.5% | -0.5% | +3.1% | mixed |
| Internet Participation FDN/XLK | ▼ Strong deterioration | 69 | numerator | -5.8% | -1.7% | -4.2% | 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.