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.
Strong rally on last Friday improved the chart, but visibly the ratio and RSI is still under the resistance. To be bullish on SPY again I need see a breakout. Other positive signs: 10 WMA is above 40 WMA, 40 WMA is pointing upward. MACD is still positive though weakened. So the picture is mixed.
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.
If support can hold and bounce up, it will be good for stocks in Q4.
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.
The ration formed a double top in mid June and now broke the blue support line. MACD turned negative and the RSI down channel seems at work.
It broke out last week, but fell hard today and now is below the resistance. I would watch the blue support line for possible break down. Will update some time next week.
Selloff to the 61.8% retracement. If we don't see buyers step in then we can expect a full retracement of the current swing.
This is the third time this level (1.80/1.85) of SPY/TLT is tested. Will this one be the last so this ratio break to the upside? That will be basically a mix between SPY going up and TLT going down. I don't trust too much in SPY to the upside, but its not crazy to see this one at 220/225. But if I have to guess, I think this ratio is going to break out because of...