CosmicDust

Yield spread vs. market top study - 3/10/2015

TYX-TNX  
TYX-TNX  
128 8 3
This chart studies spread between 30 year and 10 year treasury yield, and its correlation with SPY             top. In 2000 and 2007, breakout of this spread marked the top of the market. So can this time be different? Let's wait until it breaks out (if ever) and then we will know.
2use
2 years ago
U support the grizzly in me with this...
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CosmicDust 2use
2 years ago
hopefully no surprise this time, like market breaks out, the spread breaks down, etc.
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CEC PRO CosmicDust
2 years ago
what are your thoughts on where we stand now...looks like close to a breakout?
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CosmicDust CEC
2 years ago
Let's wait until the end of month for a read.
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CEC PRO CosmicDust
2 years ago
Agreed, wait until the end of the month. Looking like a breakout at this point, however my concern is that the trend line starting from the high on 2013-03 and through 2013-11 may apply as the channel….thoughts? I have to say this was very insightful and clever analysis on your part as it dispels the notion that we need an inverted yield curve to have a recession/drawdown in the equity market.
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CosmicDust CEC
2 years ago
Agree. 2006-2007 case showed that the spread can climb along the support line for quite some time (meanwhile, the market was able to push higher).
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dsorchestra90
2 years ago
any update on your view? Greatt chart btw
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CosmicDust dsorchestra90
2 years ago
This is how it looks now:

snapshot
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