The Stock-Bond Disconnect
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Think about this: Yields/rates are hitting all-time lows. In the past when yields were collapsing, stocks were going right along with them. Yields tanked in 2008 and so did stocks!
Now yields are setting new lows, but where is the S&P 500? Not that far off of its 2012 highs and only 92% above its 2009 lows.
Does that reflect relative strength?
Check out the S&P 500 chart below with the "Stock/Bond ratio" inset.
The $1 question: Are yields oversold/stocks at a low or do stocks have to fall a ton and play a game of catch up with yields?
(c) Kimble Charting Solutions