The relationship between equity markets and bonds is typically one of duality. As stock markets rise, bonds typically fall when investors have more confidence in the equities market and feel they will achieve a better return.
They mirror one another - normally.
The S & P is a few percent away from all-time highs yet the bond market (which is larger) is higher than the bottom of the crash back in March. Ok that’s interesting.
Equities markets have been rising as well as the bond market - in parallel, so the mirror is now distorted.
If you notice the white arrow you will see that the bond market gave hints something was up back February before the S&P lost more than 1200 points - smart money knew.
Price is compressing and we have overhead resistance – as noted by others authors, as well as divergence shown on the indicator. Looking closer in last week or so equities markets have plateaued yet bonds keep rising.
What’s all of this mean?
If bonds are correct, the market is in for a correction. When the market hit the low in March it was at point of control going back 10 ten years – that’s where it stopped at $2160. Where is market heading perhaps to the most traded price since 2016 election $2725. Sounds like an idea for another chart.
SPX
They mirror one another - normally.
The S & P is a few percent away from all-time highs yet the bond market (which is larger) is higher than the bottom of the crash back in March. Ok that’s interesting.
Equities markets have been rising as well as the bond market - in parallel, so the mirror is now distorted.
If you notice the white arrow you will see that the bond market gave hints something was up back February before the S&P lost more than 1200 points - smart money knew.
Price is compressing and we have overhead resistance – as noted by others authors, as well as divergence shown on the indicator. Looking closer in last week or so equities markets have plateaued yet bonds keep rising.
What’s all of this mean?
If bonds are correct, the market is in for a correction. When the market hit the low in March it was at point of control going back 10 ten years – that’s where it stopped at $2160. Where is market heading perhaps to the most traded price since 2016 election $2725. Sounds like an idea for another chart.
SPX
Comment:
Bonds came off - thinking about it what else can they do to fool the marketplace in order to make money. Seems clear fundamentals are a thing of the past. Perhaps on macro scale it plays out as it should but daily you need to stay sharp and accept what the market is showing you and react to that.