Over the summer, I had several posts about how the outperformance of cyclical stocks was soon going to end. I particularly looked at how the Morgan Stanley Cyclical Index (^CYC) was doing relative to the S&P 500 (^SPX)
Here?s part of a column I wrote for Real Money five months ago.
The boilermaker index has been on fire recently. The CYC is up over 22% this year and up over 40% in the past 11 months. Going back to the March 2003 low, the CYC has jumped 180%, which doubles the S&P 500. Not too shabby.
But the best has come recently.
This year, the CYC has already set an amazing 40 new highs. In April it burst through 1000, and it's quickly closing in on 1100. Like all good rallies, however, this must come to an end, and I'm afraid it won't be pretty.
The important thing to r
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