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 2026-06-10
Alerts — misleading strength & real weakness
Mid-Cap Breadth rising mainly because SPY fell sharply — a mechanically misleading improvement.
- Ratio +1.6% over 21d
- Quality score 12/100 (Denominator collapse)
- Denominator-driven (88% of the move)
Micro-Cap Breadth falling on IWC weakness — IWC dropping faster than IWM, a high-quality warning.
- Ratio -2.2% over 21d
- Quality score 75/100 (numerator-driven)
- Confirmed across 1d/21d/63d
AI Participation falling on AIQ weakness — AIQ dropping faster than XLK, a high-quality warning.
- Ratio -1.7% over 21d
- Quality score 77/100 (numerator-driven)
- Confirmed across 1d/21d/63d
Cyclical Breadth falling on XLI weakness — XLI dropping faster than XLU, a high-quality warning.
- Ratio -0.6% over 21d
- Quality score 49/100 (numerator-driven)
- Single-horizon
Every ratio — decomposed (21-day)
| Ratio | State | Quality | Driver | Num | Den | Ratio | TF |
|---|---|---|---|---|---|---|---|
| Nasdaq-100 Equal-Weight Breadth QQQE/QQQ | ▲ Absolute leadership | 11 | denominator | +0.4% | -2.7% | +3.2% | mixed |
| Credit Breadth HYG/LQD | ▲ Flat | 28 | denominator | -0.1% | -0.3% | +0.2% | aligned |
| Nasdaq Ex-Top-30 Breadth QNXT/QTOP | ▲ Absolute leadership | 30 | denominator | +2.1% | -4% | +6.4% | mixed |
| S&P 500 Equal-Weight Breadth RSP/SPY | ▲ Absolute leadership | 35 | denominator | +1.2% | -1.9% | +3.2% | mixed |
| Small-Cap Breadth IWM/SPY | ▲ Defensive improvement | 38 | denominator | -1.1% | -1.9% | +0.7% | aligned |
| Ex-Mag-7 Breadth XMAG/SPY | ▲ Absolute leadership | 40 | denominator | +1.3% | -1.9% | +3.2% | aligned |
| High-Beta Breadth SPHB/SPLV | ▼ Absolute weakness | 44 | denominator | -1.8% | +1.9% | -3.6% | mixed |
| Mid-Cap Breadth MDY/SPY | ▲ Denominator collapse | 12 | denominator | -0.3% | -1.9% | +1.6% | aligned |
| Nasdaq Ex-Tech Breadth QQXT/QQQ | ▲ Absolute leadership | 13 | denominator | +0.5% | -2.7% | +3.3% | mixed |
| Ex-Tech S&P Breadth SPXT/SPY | ▲ Defensive improvement | 34 | denominator | -1.2% | -1.9% | +0.7% | mixed |
| Cyclical Breadth XLI/XLU | ▼ Strong deterioration | 49 | numerator | -3.1% | -2.5% | -0.6% | mixed |
| Semiconductor Leadership SMH/XLK | ▼ Flat | 51 | numerator | -0.9% | -0.7% | -0.2% | mixed |
| Consumer Risk Breadth XLY/XLP | ▼ Absolute weakness | 67 | numerator | -4.9% | +2.5% | -7.3% | aligned |
| Extended-Market Breadth VXF/SPY | ▲ Absolute leadership | 18 | denominator | +0.4% | -1.9% | +2.3% | aligned |
| Nasdaq Tech vs Ex-Tech QTEC/QQXT | ▼ Flat | 39 | denominator | +0.4% | +0.5% | -0.1% | mixed |
| Software Participation IGV/XLK | ▲ Absolute leadership | 51 | numerator | +1% | -0.7% | +1.7% | mixed |
| Financial Risk Breadth KBE/XLU | ▲ Absolute leadership | 59 | numerator | +3.7% | -2.5% | +6.4% | aligned |
| Micro-Cap Breadth IWC/IWM | ▼ Strong deterioration | 75 | numerator | -3.3% | -1.1% | -2.2% | aligned |
| AI Participation AIQ/XLK | ▼ Strong deterioration | 77 | numerator | -2.4% | -0.7% | -1.7% | aligned |
| Small Growth Breadth IWO/IWN | ▼ Absolute weakness | 83 | numerator | -2% | -0.1% | -1.9% | mixed |
| Large Growth vs Value IWF/IWD | ▼ Absolute weakness | 92 | numerator | -3.1% | +0.3% | -3.4% | aligned |
| Internet Participation FDN/XLK | ▲ Defensive improvement | 29 | denominator | -0.3% | -0.7% | +0.4% | 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.