Dueling Patterns in the SPY:Bond Ratio – AB-CD Winning Over Cup and Handle
- Posted by Greg Harmon
- on May 22nd, 2012
About a month ago we looked at the ratio chart of the S&P 500 SPDR, $SPY, against the iShares Barclays 20+ Year Treasury Bond Fund, $TLT, in Recognize This Pattern in the S&P 500 vs Bonds Chart?. Since then it turns out that the handle on that cup is growing a bit too long to put it in the dishwasher to clean. Take a look.
Actually about the only thing that looks up in this ratio chart is that the Relative Strength Index (RSI) is in technically oversold territory and working it off moving higher. If this continues then there is a chance, not a certainty but a chance, that the ratio reverses higher. What seems more likely is that the trend lower continues with an objective on the ratio of 0.77. That has big implications for both the $SPY (lower) and the $TLT (higher). A move to 150 on the $TLT with a move to 126 on $SPY gets it close. Are you ready for this? Then again, maybe this cup and handle is meant for hand washing.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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