There are a few signs that equity markets could be on the verge of a fresh move to the downside. Here are a few charts to explain.
1. Equity/Bond Ratio
The ratio between equities bonds has rallied into a significant and is showing signs of rolling over, this suggests the momentum has stalled and we could be about to see a shift out of riskier assets (equities) and into safer havens (bonds).
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Head and shoulders patterns everywhere! On the 4H charts I can make out 2 head and shoulders patterns, both are bearish reversal signals and suggest lower prices maybe seen. There is a nice confluence of targets from these patterns around 2640, so this is what I will be looking to target.
The ratio between stocks and bonds has hit a clear resistance and looks ready to resume lower (Favouring owning bonds over stocks)