$XLV vs $SPY at multi year low. Is more downside expected?

In this space we talk a lot about the market outperformance and how this has resulted in indexes at ATH. The SPX and NDX and their corresponding ETFs: QQQ and SPY have also made ATHs. But if peel under the surface we can observe that very few sectors have consistently outperformed the S&P 500. The Technology sector represented by XLK has consistently outperformed the $SPY. The $XLK/SPY is in a upward channel depicted by the purple line. The SPDR select sector Technology sector has consistently increased its weightage on SPY and the ratio $XLK/SPY is currently at 0.41 which is an ATH.

But the same cannot be told about the SPDR Healthcare Sector. The ratio between $XLV/SPY is making multi year low. With the ratio currently at 0.21 it is approaching its multi-year lows of 0.1975. The ratio was so low last in Sept 2000. Hence the question comes what should we expect the XLV which is making new lows against the SPY? Will we visit the lows of 0.1975? If it happens then can we expect a upward momentum from his double bottom situation?

In my estimate in this bull market and Tech sector outperforming the XLV will make new lows vs SPY and the ratio will revisit the 2000 lows. But if on the macro front we have weak jobs numbers and recession risk rising then the XLV can in fact draw inflows and outperform the index. Hence my estimate $XLV/SPY will sweep the multi-year low and then bounce back into 2026.

Verdict: Still more downside possible in $XLK/$SPY. Go long XLV when the ratio is @ 0.1975 and into 2026.