FINANCIAL ICEBERG
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 TECHNICALS
Stocks to Bonds Ratio : Macro Divergence Prevail ?
​November 11  ( From Tradingview  )
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The Situation

​Since the beginning of the financial crisis, the Federal Reserve has
​been obliged to inject tons of liquidity into the system. Financial
​assets like the SP500 had a very good performance indeed; the
​correction lately has not been enough in terms of valuation 
​compare to interest rates.

​​Even the main technical indicators like the Ratio of the IEF  ETF
​( iShares 7-10 Year Treasury Bond Fund ETF ) compare to the
​SP500 (IVV TEF -  iShares Core SP500 ETF)​ are pushing valuation ​
​again to the limit on a ratio basis as history suggest.


It is the third time that the 50 DMA ( Day Moving Average - red line on the
​chart below )
on that ratio turn south since 2007. ( See chart below - vertical white lines )

​​The only time that this ratio and the 50 DMA was at that level was in December 2007 ( The Critical Zone ), and then the SP500 started a correction as you can see on the chart below.

The Divergence Continue to Prevail since December 2013 as the Ratio is making lower highs and lower lows but the SP500 continue to grind up.​​

As stocks battle to keep near their high ever, bonds technicals are in a poor condition. In fact, the IEF ETF
​( iShares 7-10 Year Treasury Bond Fund ETF ) is testing a Major Support Trendline that started back in June 2007 as shown by the second chart below. ( Top Panel - Blue Trendline - Ellipse )

​​​​But few realize that already, if we take the corporates credit bond funds instead of the US Treasurys, we did already broke since July 2014 that Major Support Trendline as shown by the second chart below. ( Middle and Bottom Panel - Blue Trendline - Ellipse )


Read Also:​​
​Goldman Contrarian Joins Chorus Warning on Bond-Market Liquidity


Debt Wall Looms Over Fed

​It's Not The Record High Debt That Is The Biggest Risk, It's This


Stocks to Bonds Ratio : Macro Divergence Prevail ?   $SPY, $IEF  #Trading #bonds  #investing #SP500
WEAKLY RATIO
SP500 ( iShares Core S&P 500 ETF ) over IEF (​ iShares 7-10 Year Treasury Bond )
50 DMA ( Red Line )
SP500 Index - SPX ( Bottom Panel - Candles )​​
Daily Chart ( Candles )​
​IEF ETF  (​ Top - Panel -  iShares 7-10 Year Treasury Bond )
HYG ETF ( Middle Panel - ​iShares iBoxx $ High Yield Corporate Bond )
JNK ETF ( Bottom Panel - ​SPDR® Barclays High Yield Bond ) 


Financialiceberg.com
Financialiceberg.com