The ratio itself, RSI and MACD all said the same thing: it rolled over, meaning TLT starts to outperform SPY.
The rising wedge is exhausting and looks like it is rolling over. MACD maybe catching up.
Usually I do weekly but I want monitor it more closely for potential breakout on the daily chart (no yet). A breakout may mark the short term bottom of the market.
Frame your support and resistance. Know the geometry and technical levels that cause a response. Study the chart for "Repeatable Pattern" and exploit your edge.
MACD is still positive and pointing up, RSI is not falling as fast as the ratio... but most importantly, we need the ratio and RSI to breakout to confirm the case, not yet.
MACD has some catchup to do. RSI made a double bottom and now is turning up and breaking out. This means in short term stock is becoming more favorable than bond.
The ratio is right on support. In 2007 the breakage means a long bad bear market.
Once support is hit, it can rebound, or fall right through. Will have to trade accordingly...
The ratio continued to push lower and soon it will hit the blue support. It might bounce up and might fall directly through. Note the blue support is a long term support and market will be in trouble if it breaks.
The ratio broke down and then made a lower high, and now it appears to be going down. This is short term bearish for stocks (indicating bonds may out perform stocks). This may last from couple of weeks to couple of months and thus there may be some swing trade opportunities.
Reflecting on warning signs before the selloff: 1. ratio broke blue support for weeks before the selloff 2. ratio RSI broke support for weeks before the selloff 3. SPY long term trend line about to break weeks before the selloff and officially broke last week. So we did get plenty of warning signs.
Not much to say, not much science behind it.
Looks more and more likely it is rolling over. Last 2 times when this happened, SPY dropped 7.8% and 5% respectively. So far SPY has dropped 3%. More likely it has more to go lower, but market seldom provides a clean-cut.
Technical profile is similar to that of May 2008. But we need to have an open mind about a possible breakout. We should know the outcome this month, or in March. Generally, a breakout is good for stocks, bad for bonds, and a breakdown is good for bonds and bad for stocks. Keep in mind that stock and bond can go same direction at different pace, so the ratio cannot...
A close above 2060 and we will be looking for buy triggers on a lower time frame. See our weekly outlook: youtu.be
SPY and TLT had some large moves recent days, but on the chart it is just a blip. But I will pay more attention if the ratio can go back above the pink line or above the 10 week moving average. Right now it is not there yet and the down trend is well established. I will assume the trend will continue until it is visibly changed.
Similarities: . SPY/TLT death crossed. . TLT faces major resistance. If history repeats, expect: . TLT may go side way and range bound for some time (for a year?) . TLT eventually may spike to $150-160 range. . Continued decline of SPY. Also, based on the death cross of SPY/TLT, SPY might have peaked last December.