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EffyewMoney
Jan 6, 2023 9:46 PM

SPY's historic relationship with the 10-year/3-month Treasuries 

SPDR S&P 500 ETF TRUSTArca

Description

Things tend to not go so well for SPY when the 10-year/3-month Treasury chart crosses zero. Downtrend typically spans between 2 and 3 years, falling about 20-25% per year. It has been 2 months since we crossed the zero line again. A bottom for the treasuries chart has not yet been established.

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A better screenshot of the chart.

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Correction: Fixed the duration of the DotCom Crash.

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it's been a while, time for an update.

Still right on track with expectations. These short term rises can't happen without the bullish sentiment we're starting to see in discussion forums.

Added some color coding, details about interim highs after T10Y3MO fell below 0, but before SPY crashed, and details about the Federal Funds Rate to help illustrate its role in the relationship between these two charts.

Comments
BrewLee
That is a very interesting observation.
MerrickSanders
Nice work Effyu.
Wonder what this will translate to. Will we see the spy back in the lower quadrant of the 300s?
EffyewMoney
@MerrickSanders, It's hard to say precisely, and I'd be naïve to think I could account for all the variables involved in that length of time ahead. I looked again recently and T10Y3M had fallen as low as -1.67. It was already in unprecedented lows back in January, and it just gets more bearish the more it falls. Anything can happen though. I've been meaning to update this for a while with adjacent analyses, but been too busy with other stuff.
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