US10Y
versus
SPX
inverse correlation analysis. Work in progress indicator for anticipating market trend switches.
Notes:
- Emerging correlation identified within US10Y/SPX ratio.
- Spikes in ratio (orange vertical line, dotted) aka bond yield ROC/volatility = higher probability of risk-off sentiment (ie big tech & growth stock rotation).
- Correlation only valid when market is "hyper-sensitive" to bond market fluctuations, especially during recent US Fed undertaking rate hike cycle.
- Should be used in conjunction with other confluence factors to provide conviction in swing/position trades.
Comment:
US10Y vs. SPX chart update (Thurs 14/12):
- US bond yields getting slaughtered post-FOMC.
- Ratio ROC keeps falling - expect SPX to continue rallying, TBC.
- Eyes on VIX, DXY, SPX support/resistance levels, etc for further confluence re: parabolic moves.
