US10Y vs. SPX ~ Inverse Correlation/Ratio Indicator (Dec 2023)

Dec 11, 2023

US10Y versus SPX inverse correlation analysis.

Work in progress indicator for anticipating market trend switches.

Notes:

• Emerging correlation identified within US10Y/SPX ratio.
  
• Spikes in ratio (orange vertical line, dotted) aka bond yield ROC/volatility = higher probability of risk-off sentiment (ie big tech & growth stock rotation).
  
• Correlation only valid when market is "hyper-sensitive" to bond market fluctuations, especially during recent US Fed undertaking rate hike cycle.
  
• Should be used in conjunction with other confluence factors to provide conviction in swing/position trades.
  

Dec 14, 2023

Note

US10Y vs. SPX chart update (Thurs 14/12):

• US bond yields getting slaughtered post-FOMC.
  
• Ratio ROC keeps falling - expect SPX to continue rallying, TBC.
  
• Eyes on VIX, DXY, SPX support/resistance levels, etc for further confluence re: parabolic moves.