Dueling Patterns in the SPY:Bond Ratio – AB-CD Winning Over Cup and Handle

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.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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
Dragonfly Caps Blog