Today we will talk about bonds and stocks, specifically about 10Y US Notes and S&P500.
Well, as you can see SP500 and 10Y US Notes are in negative correlation, but of course there could be deviations, especially in the lower time frames.
What we have noticed in the past years is that stocks are always bullish, especially if bonds are trading bearish or sideways. But, when 10Y US Notes starts rising, then stocks slow down.
If we take a look at the current wave structures, we can see a massive rise on S&P500, mainly because of sideways price action on 10Y US Notes and this has been the case since 2018. However, 10Y US Notes is currently trading at the strong weekly trendline and if it's about to bounce and recover, then S&P500 may see limited gains.
Considering that we are at the beginning of new year 2021, which is actually a cyclic period, then we should be aware of a change in the trend, at least for a temporary period of time.
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Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
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Bonds are bouncing and recovering, so is it finally time for Stocks to slow down!? #ZN #10YUSNotes #ES #SP500 #KeyLevel