Long: TLT / Short: SPY
Almost breaking out of 38.2% Fib levels'
Momentum is growing - 60 MA almost crossing 120MA from below'
Almost breaking out of trendline
Secotor Rotatiion - Equities to Bonds.
PMI's < 50
Probably the most basic rotation investment strategy, is the switching strategy between the S&P 500 US stock market (SPY) and long duration Treasuries (TLT). The SPY-TLT ETF pair is a very interesting investment strategy, because most of the time these two ETFs profit from an inverse correlation. If there is a real stock market correction, then Treasuries like TLT...
This is a spy/tlt ratio chart. It shows relative strength of market vs bonds. Clearly bullish market (SPY) at this point, even if I don't see how I listen to the chart and I'd be and am long this chart.
U.S. equities bounce from initially being down 15 handles, but volatility is expected. However, is recent move expected? Yes, in my opinion, as markets are ultimately forced to re-price growth and inflation .
Step back from the earnings headlines because that's literally old news. Although Q3-18 earnings growth is up nearly 20 percent, over 60 percent of...
long term trend is still up as 40 week moving averaging is still pointing up. May dancing around 40 week MA for a while before we know a clear direction. Under currently condition, we should overweight stocks over bonds.
To get a a graph of the portfolio, I added the S&P500 and TLT together. But to keep them roughly equal I used 50% of the price of $SPY and 100% of the price of $TLT.
I create the graph by typing the following into the symbol window: SPY*.5+TLT
It shows also that the mood of the country might have been pretty bad going into the election since the combined...
The ratio is near the double resistance, and looks like is working on a breakout. We will know more in the next couple of weeks. So far RSI broke out, MACD is positive, 40 week MA is turning upward.
If this ratio breaks out, we will reduce even more bond holdings (and may start to short bonds), and move into equalities (not necessarily US stocks).
The ratio is still within the triangle, with SPY has a slight advantage. Soon it will have to break out, or break down. Worst case is both SPY and TLT are going down, rendering the ratio useless (meaning cannot use TLT as a safe heaven).
This ratio has been consolidating in the triangle. So far SPY has an upper hand but not much (RSI > 50, MACD > 0, price > 10 WMA > 40 WMA). So it is still warranted to continue to hold both bond and stock, and probably tilt toward to stock a little bit more.
The ratio is still bearish looking as 10 MMA is still pointing down and though it registered a higher low in June 2016, no higher high yet.
The ratio has not confirm recent broad market breakout. And thus it is not all clear to long equalities and overweight bond is still warranted.
SPY keeps making all time highs but has not been confirmed by SPY/TLT ratio.This means it continues to be appropriate to hold a mixed allocation to bond and stock, and still over weight bond (the ratio is still in its down trend).
In a similar setup in 2008, the ratio rolled over in the 5th week, and we will see how it behaves in the coming week.