IF this ratio is declining, risk is getting punished.
Note how the stock market goes sideways if this ratio is declining.
Siamese Twins Here as Banks De-Leverage from 2007-2010.
Since then if HYG/TLT is declining - the stock market is is flat over extended periods of time. Note the red arrows marked "SPY SIDEWAYS".
Recently, there is a similar price pattern in this ratio to the low in 2012. The Ratio made a double bottom with a strong reversal off of the bottom (note the yellow circle) and then a drop again after that bounce, which we are in now.
Look for HYG to turn up relative to TLT in the coming days and weeks as a sign that the stock market can build the chance for a rally. For now, there is no signal. Rather, it is mirroring the last bottom from the summer of 2012.
Tim
3:16PM EST Sep 23, 2015
评论
claydoctor
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Tim, would you mind updating this chart and relationship. been watching high risk v low risk ratios lately, similar to 2007, 2011? Thanks
RCP_
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Appreciating your posts - thanks
Davblitz
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HYG/TLT has not yet bottomed, in my opinion. Thanks