I’ll be in a dentist’s chair by the time you read this, but I didn’t want to leave you with nothing to think about while I get my first crown put in.
Fascinating chart, showing the ratio of S&P500 to T-Bond. This implies (at least over the past few years) that there is a finite relationship between the two that oscillates. (I’d love to see much more data on this — at least another 30 years or so).
Dennis Gartman noted:
"It makes rather clear that once bonds begin to gain upon debt (as they did back in ’99… or again in early ’04), they tend to continue to do so for a very long while. But once the old trendline is broken, it is usually definitive and we can trade in this new direction for many months, knowing that the new trend has some very real staying power. The trend toward equities outperforming debt continues apace. Trade then accordingly, buying stocks whilst selling debt."
Graphic courtesy of MacroMavens (via Dennis Gartman)