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 ...
We are at a crucial point in this ratio. A break of two major trends lines and 200 day ma should lead to a much needed
correction in the overall market. Will it find support here?
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.
Usually I do weekly but I want monitor it more closely for potential breakout on the daily chart (no yet). A breakout may mark the short term bottom of the market.
