S&P 500, Bitcoin, Treasury Update

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S&P 500

Are you going to talk about the expanding diagonal again?

If a simple pattern works so beautifully in an incredibly challenging environment, you ride it and milk it as long as it works (if you haven’t read about the expanding diagonal yet, you can do so here:

S&P 500 Path is Deceptively Simple

The October 12 Profit Radar Report that: “This week’s new S&P 500 low meets the minimum requirement for a wave 5 low, and RSI-2 is nearing over-sold again.”

Starting on October 13, the S&P soared almost 300 points.

Obviously there are still a ton of economical and political cross currents, but the KISS approach is to look higher as long as double support (shown on the monthly chart) holds.

Treasuries

“Distrust in government is a global mega trend. The US Treasury market may just have carved out a key reversal and perhaps major market top.” March 15, 2020 Profit Radar Report

30-year Treasury bonds just suffered the worst one-year decline on record and are down 35% from their all-time high. The last 2 1/2 years have erased about 43% of the gains racked up during a 40-year bull market.

But, as mentioned in the October 23 Profit Radar Report, there is long-term support near current price, short-term RSI-2 is over-sold, RSI-35 is around support, and a furious rally is becoming likely.

The daily chart shows TLT up some 6% since October 24, now nearing over-bought and resistance, but price is compressed from almost 9 month of steady losses, so further up side (perhaps after a pullback) is very possible.

Bitcoin

October 23, Profit Radar Report: “Bitcoin futures are trading above trend line resistance. RSI-35 has been rising over the past 4 months where price was range bound. This is not a screaming buy signal, but the development is overall positive.

Aggressive investors may consider either 1) buying bitcoin with a stop-loss below either of the support trend lines or 2) buy after a break above resistance around 20,400. One ETF alternative for bitcoin is the Grayscale Bitcoin Trust (GBTC).”

Bitcoin has since broken out, and previous resistance is now support (and potential stop-loss) for longs.

Continuous updates for the S&P 500, Treasuries, Bitcoin are available via the Profit Radar Report.

If you want to be the best-informed investor you know, and have access to always relevant and purely fact-based research, sign up for the Profit Radar Report. 

The Profit Radar Report comes with a 30-day money back guarantee, but fair warning: 90% of users stay on beyond 30 days.

Barron’s rates iSPYETF a “trader with a good track record,” and Investor’s Business Daily writes “Simon says and the market is playing along.”

US Treasuries – The Next Bursting Bubble?

Question: I read somewhere that you compared US Treasuries to Tesla. Is that true? – Richard – Chicago, IL

Answer: Yes, I did. To understand why I compared 30-year Treasuries to TSLA, let me share my take on TSLA first.

I published the following analysis about TSLA in the February 8 Profit Radar Report:

“It’s rare to see a mania big enough to create the ‘support bowl’ line, but TSLA managed to do it. The last big mania with a similar trajectory was bitcoin in November/December 2017. The last one in the automotive industry was VW in October 2008. Ironically, the rally in VW shares (from below 300 to above 1,000 in less then 2 months) was also driven by short sellers, spooked by Porsche taking control of VW. Within a couple months after its spike above 1,000, VW fell back below 100. 

The chart below allows for a comparison between TSLA and Volkswagen. Inserted in the upper right is a chart of bitcoin along with its corresponding ‘bowl’ support.”

Since then, TSLA fell from 969 to 361.

Knowing what happened to TSLA and what led up to TSLA’s fall explains why I compared 30-year Treasures und the iShares 20+ year Treasury ETF (TLT) to TSLA. The analysis below is from the March 8, Profit Radar Report:

“30-year Treasury prices spiked more on Friday than the S&P 500 fell, and TLT was up almost twice as much as 30-year Treasury futures. 30-year Treasury futures are up another 2.5% tonight. Appears like a historic flight to safety, and quite likely sign of panic. It’s hard to apply rational analysis to a market that’s acting irrational. 

The stock market has shown that what goes up, comes back down, and it can do so very quickly. Odds are the same will happen to Treasuries sooner or later. 

In fact, the chart includes curved ‘bowl support,’ the same kind of support/pattern that the  showed for TSLA. Down side risk is very high, and aggressive traders may consider adding to shorts.”

Below is an updated chart for 30-year Treasury futures:

There is a support shelf at 167 – 164, which should cause a bounce, but as long as resistance around 178 holds, the trend is lower.

Continued updates, projections, buy/sell recommendations are available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Is the Inverted Yield Curve a Bear Market Signal

Bloomberg just called the inverted yield curve the ‘harbinger of doom.” Is this a fact or fear mongering?

What is an inverted yield curve?

In the investment world, there is generally a strong correlation between maturity and yield. Longer-term maturities pay more interest than shorter-term maturities.

For example, 10-year Treasuries pay more interest than 2-year Treasuries. Since this happens most of the time, this condition is called a normal yield curve (blue graph).

But, we live in interesting times, and the yield curve is about to invert (red graph). This means longer-term maturities actually pay less than shorter-term maturities.

Harbinger of doom?

In fact, the short end of the yield curve – 5-year compared to 3-year (5/3) – has already inverted, which means that 3-year maturities actually pay more interest than 5-year maturities.

This has happened five other times since 1970 (red arrows on chart below mark occurrences since 1976). Only in 1973 did it coincide with a market top. The other four times, it took a minimum of two years before the next big correction.

The chart below plots the S&P 500 against a more popular yield curve, which compares the 10-and 2-year yields. The spread is currently only 0.11%, and it’s threatening to fall below zero for the first time since 2007.

The red bars mark all prior times when the 10/2 yield curve inverted. Although it led to bear markets in 2000 and 2005, it was not a consistent ‘harbinger of doom’ in the 20th century.

It’s also worth mentioned that the S&P 500 was down more than 11% before the yield curve inverted.

Conclusion

The facts show that using an inverted yield curve – 10/2 or 5/3 doesn’t matter – as a bear market signal is at best inaccurate, and at worst misleading.

However, and that’s a big however, that doesn’t mean that stocks won’t slip into a bear market. There are other reasons why stocks were ‘supposed to’ tumble.

My down side targets, published on September 3 (when the S&P traded around 2,900) via the Profit Radar Report, ranged from 2,575 – 2,289. That down side target was provided before the yield curve inverted.

Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Business Daily says: “When Simon says, the market listens.” Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report.

Continued updates are provided via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF e-Newsletter to get actionable ETF trade ideas delivered for free.

US Treasury bonds and notes have been range bound for over six months.

There is reason to believe that Treasuries, especially 30-year Treasuries bonds, will soon break higher. Why?

Smart Money

Commercial hedgers – a group of traders considered the ‘smart money’ – are buying Treasuries across the bond curve in anticipation of higher prices.

The chart below shows commercial hedgers’ aggregate net exposure to 5, 10, 30-year Treasuries (blue graph).

As the green arrows show, hedgers’ bullish bets are generally vindicated by a period of rising prices.

Below is a list of ETFs likely to benefit from the bullish developments seen by commercial hedgers. Long-term maturities are more dynamic and subject to bigger price moves.

• iShares Short Treasury Bond ETF (NYSEArca: SHV)
• iShares 1-3 Year Treasury Bond ETF (NYSEArca: SHY)
• iShares 3-7 Year Treasury Bond ETF (NYSEArca: IEI)
• iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF)
• iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT)

Seasonality

The green chart insert shows that seasonality is generally bullish for the remainder of the year.

A move above the red resistance lines is necessary to unlock an up side target of 129 – 133. This up side target is based on Fibonacci retracement levels (50% and 61.8%) and an open chart gap.

Sustained trade below 120 would put any rally on hold.

Above analysis was initially published in the August 26 Profit Radar Report. Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Business Daily says: “When Simon says, the market listens.” Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s profile of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

Are Treasury Bonds Carving out a Major Top?

The multi-decade Treasury bond bull market reached another all-time high in July.

The June 12 Profit Radar Report put 30-year Treasuries bonds on our ‘major market top watch list’ when it published the chart below and stated:

“30-year Treasury futures climbed to a new all-time closing high while commercial hedgers (smart money) have racked up record short exposure. Seasonality is about to hit a weak spot. Bearish RSI divergences exist on various time frames. We will be looking for an opportunity to short 30-year Treasuries.”

Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Bussines Daily says “When Simon says, the market listens.” Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report.

It took a little while for this trade to ‘ripen,’ but the July 27 Profit Radar Report featured this recommendation:

“The July 17 PRR stated that: ‘30-year Treasuries may bounce a bit to perhaps give us a second bite at the cherry.’ This bounce materialized this week, and Treasuries reached one of two targets (173’27 and 175’10) that should lead to a down side reversal.

We will leg into this short 30-year Treasury trade with half a position. Investors can short via futures, short TLT or buy the Short 20+ Year Treasury ETF (TBF). We will likely deploy the second half of this trade if Treasuries rally into the second target.”

Treasuries never rallied to the second bounce target, but instead started stair stepping lower.

We closed the short Treasuries position when trade first touched the 200-day SMA on September 13.

Treasuries started to rally shortly thereafter. This rally brings Treasuries to an inflection point.

Inflection Point

From the July high to the September low, Treasuries seem to have traced out 3 waves (according to Elliott Wave Theory – EWT).

Based on EWT, a 3-wave move is a counter trend move, while a 5-wave move usually marks are trend change (or trend continuation in other cases).

This means that the bounce from the September low is either:

• Wave 4 followed by a wave 5 decline to new lows. This would suggest that the July high is a major top (red number labels).
• The beginning of another rally leg following a complete 3-wave correction (green arrow).

If the rally from the September low is a wave 4, it should stop near the red resistance line or the black trend channel. Some may argue that the rally has gone too far already to be considered a wave 4 bounce.

While this doesn’t remove all ambiguity, the wave counts give traders some helpful directional clues, such as:

• Going short is risky while trade remains above the September low
• Buyers should dial back risk on a drop below the September low
• A move above 170 and 171 should lead to more gains

The Profit Radar Report monitors dozens of indicators to identify low-risk or high probability setups for various asset classes.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s profile of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, and 24.52% in 2015.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

 

Two Inversely Correlated Asset Classes Provide Lifeline and Noose for S&P 500

U.S. equities are part of an intricate global financial ‘ecosystem.’ They do not trade in a vacuum. As part of something bigger, U.S. equities are subject to certain correlations, which provide clues about U.S. stocks’ next move.

U.S. stocks do not trade in a vacuum; they are part of an intricate ‘ecosystem’ of worldwide financial markets.

As with any ecosystem, financial markets adhere to the ‘cause and effect’ principle.

Just like there’s a correlation between birds of prey and the mice population or bees and pollination, there are correlations between specific financial markets (some are directly correlated, others are inversely correlated).

Understanding market correlations/connections can be helpful in forecasting stock market movements.

Some of those financial ecosystem correlations are:

1. U.S. stocks (or S&P 500) and the Japanese yen
2. U.S. stocks (or S&P 500) and U.S. Treasuries

S&P 500 vs Japanese Yen

Due to the carry trade, the yen has become an important force for the S&P 500.

As part of the yen carry trade, U.S. investors borrow yen to buy U.S. stocks. The yen can be borrowed cheaply and U.S. stocks have delivered juicy returns in recent years.

Courtesy of Japan’s Prime Minister Shinzo Abe, a falling yen makes paying back the yen even cheaper and has made the carry trade even more attractive.

A rising yen would have the opposite effect on U.S. stocks.

The Japanese Yen Futures chart below shows the yen butting against double trend line resistance and the 200-day SMA.

S&P 500 vs 30-Year Treasuries

Bond investors have a reputation to be smarter than stock investors. I like to monitor 30-year Treasury bond prices (corresponding Treasury ETF: TLT) as they tend to have an inverse correlation to the S&P 500.

On April 2, 30-year Treasury prices found support at the green trend line. The April 2 Profit Radar Report stated that: “30-year Treasuries have reached near-term support. Prices tend to respond to such trend lines, so a bounce is possible. A bounce for Treasuries would provide headwinds for higher stock prices.”

30-year Treasury Futures bounced from support and now trade above double trend line resistance. This bullish breakout (assuming it sticks), suggests lower prices for U.S. stocks.

Although those charts don’t tell us the up side potential for the yen and Treasuries (or down side risk for the S&P 500), they do tell us that we are at a pivotal point in time.

The S&P 500 (NYSEArca: SPY) chart confirms the message of yen and Treasuries and provides clear ‘points of ruin’ or must hold support levels.

Here is the most important near-term support level:

Don’t Get Fooled by This S&P 500 Bounce

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

How TLT ETF Unnecessarily Fooled S&P 500 Investors … and May Do So Again

Like detectives, investors are always searching for clues about the market’s next move. Unfortunately some clues turn out to be misleading. A false Treasury ETF (TLT) breakout just sent investors in the wrong direction … and may do so again.

I’m a big fan of ETFs, but when analyzing an asset class, the analysis should be based on the purest representation of that asset class.

A number of technical analysts spotted a bullish TLT breakout on March 27. TLT is the iShares 20+ Year Treasury ETF (NYSEArca: TLT).

On March 28 I published the article “Beware of False TLT Treasury ETF Breakout and S&P 500 Breakdown.”

TLT’s breakout appeared like a ‘fake out break out’ because the 30-year Treasury Futures (ZB), a purer representation of Treasuries, didn’t confirm the breakout.

The first two charts below (featured in the March 28 article) show the discrepancy between TLT and ZB.

In short, TLT is above resistance (green bubble), ZB is well below important double resistance.

The performance of 30-year Treasuries can be a powerful tell tale sign, as Treasuries often move in the opposite direction of the S&P 500.

A Treasury breakout would likely have coincided with an S&P 500 breakdown.

The third chart zooms in on 30-year Treasury futures (ZB) and highlights the performance since March 28 in blue.

We see that ZB was rejected by resistance, but more importantly, ZB is now trading right on top of short-term green trend line support (green arrow).

This means that it will probably takes a drop below support to unlock lower prices for ZB and higher prices for the S&P 500.

Just like 30-year Treasuries have found support, the S&P 500 is dealing with key resistance.

This S&P 500 resistance is revealed here and may well change the way you look at the S&P 500:

S&P 500 – Stuck Between Triple Top and Triple Bottom – What’s Next? (Article #4)

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

Beware of False TLT Treasury ETF Breakout (and S&P 500 breakdown)

The long-term Treasury ETF (TLT) just saw a technical breakout above resistance. This is bullish for TLT (and bearish for stocks), but it may be a premature fake out. Here’s how to get confirmation for a real Treasury breakout.

A number of technical analysts believe to have identified a bullish technical breakout for the iShares 20+ Year Treasury ETF (NYSEArca: TLT).

The TLT Treasury ETF chart below highlights Thursday’s breakout (green bubble).

At first glance, TLT’s push above resistance qualifies as a breakout.

As great as ETFs are, I personally prefer to use the purest representation of an asset class as a foundation for my analysis. For long-term Treasuries, that’s the 30-year Treasury Futures (/ZB).

The 30-year Treasury Futures chart looks slightly different. Trade has not yet broken above resistance.

Both charts include all (trend line) support/resistance levels and how prices reacted (blue bubbles).

TLT has been more prone to false breakouts or breakdowns than futures.

This doesn’t mean 30-year Treasury futures won’t break out. Bullish TLT action may act as a magnet and pull prices higher. The prudent approach is to wait until futures confirm TLT (especially sinse TLT’s breakout didn’t occur on highly elevated volume).

The action of Treasuries may also provide important clues for the S&P 500 (SNP: ^GSPC). The S&P 500 has been stuck in a rut for all of 2014 and a Treasury breakout may coincide with an S&P 500 breakdown.

Just as Treasuries have to confirm a bullish breakout, the S&P 500 has yet to confirm a break down.

This following article features the messiest S&P 500 chart I’ve ever published. But ironically it may explain the stock market’s up-and down better than any other chart:

Short-Term S&P 500 Forecast

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

Stock/Bond Ratio Projects Exciting Times Ahead

Are stocks ripe for a deeper correction or is the 5%+ January hiccup – the biggest in well over a year – already in the rearview mirror? The stock/bond ratio provides a dimension not often considered.

The S&P 500 (SNP: ^GSPC) just had its first 5%+ correction in well over a year.

Some say that’s bullish, because it brought prices down to levels that spark new buying. Others point to a potentially bearish technical breakdown at a time when stocks are over-loved, over-valued, and over-hyped.

Which one is true?

As the old saying goes, there are always three sides to an argument: His, hers and the truth.

The stock/bond ratio provides another dimension to this ‘argument.’

We use the SPDR S&P 500 ETF (NYSEArca: SPY) as proxy for stocks and the iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF) as proxy for bonds.

The S&P 500 ETF – SPY/IEF ratio chart below shows the SPY/IEF ratio vacillating between support and resistance.

The SPY/IEF ratio rises when the S&P 500 moves higher and bonds move lower.

A spike in the SPY/IEF ratio accompanied every S&P 500 high. This includes the most recent January high.

However, the SPY/IEF ratio did not touch resistance at the most recent high. It also didn’t touch support at the most recent low.

Nothing says that resistance or support need to be met, but often such support/resistance levels act as magnets.

If the SPY/IEF ratio is still in need of touching both support and resistance levels, as a result, we conclude that the January high didn’t mark a major top and last week’s low didn’t mark the end of this correction.

Obviously, this would translate into exciting times ahead.

A detailed forecast for the S&P 500 is provided here:

S&P 500 Forecast: Short-Term Gains vs Long-Term Pain

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

Bond / S&P 500 Ratio Suggests Bonds Are Undervalued

Boring or exciting, tortoise or hare, bonds or stocks? There are different ways to figure out when to overweigh stocks over bonds or vice versa. This indicator shows the value of bonds relative to the S&P 500 Index.

Boring or exciting, tortoise or hare, bonds or stocks?

A low interest rate environment generally favors stocks as investors flee from fixed-income vehicles into higher-octane stocks.

This has been a winning strategy. The SPDR S&P 500 ETF (NYSEArca: SPY) is up 25%, compared to a 3% loss for the iShares Barclays 7 – 10 year Treasury Bond ETF (NYSEArca: IEF).

However, one indicator suggests that 10-year Treasury bonds are about to catch a bid.

The indicator is the ratio between the S&P 500 Index (SNP: ^GSPC) and the iShares Barclays 7 – 10 Year Treasury Bond ETF (IEF).

The chart below plots IEF against the S&P 500 : IEF ratio.

The red arrows highlight extremes in the S&P 500 : IEF ratio. More often than not an extreme in the ratio has coincided with lows for IEF and Treasury bonds in general, which includes the iShares Barclays 20+ Year Treasury ETF (NYSEArca: TLT).

The S&P 500 ETF : IEF ratio as a bullish indicator for Treasury Bonds however, is in conflict with our technical analysis for the 10-year Treasury Note yield.

The longer-term trajectory for the 10-year rate seems to be up.

The second chart of the 10-year Treasury Note yield (Chicago Options: ^TNX) shows that yields have broken above a short-term resistance trend line, which seems to put yields on track to surpass their September high (see chart annotations for previous Profit Radar Report analysis).

In an ideal world all indicators always point in the same direction, but when is market analysis ever ideal? It even takes some hindsight to pinpoint actual ratio extremes highlighted above.

The indicators may be telling us that there’s some short-term weakness for bond yields followed by a period of rising 10- year yields (with a target above 3%).

Does the S&P 500 : IEF ratio also apply to the S&P 500 Index?

A chart that plots the S&P 500 against the S&P 500 : IEF ratio can be found here. Although the chart isn’t failproof, it sends a message that shouldn’t be ignored. View S&P 500 vs S&P 500 : IEF ratio chart here.

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report uses technical analysis, dozens of investor sentiment gauges, seasonal patterns and a healthy portion of common sense to spot low-risk, high probability trades (see track record below).

Follow Simon on Twitter @ iSPYETF or sign up for the iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.