This is one of my oldies but goodies. I apologize for those who viewed on Monday....I had placed only the indicator, and not the comparison chart to the SPX. Here is the correct chart with comparison and vertical lines in red and green to allow a quick review of how good this indicator is in a predictive way.
Methinks that complacent longs stand a good chance of getting a 6% to 8% down move in the next few days to few weeks.
The Bond indicator is on the bottom.
The red lines indicate a "bottom" on the indicator, and most often a subsequent down move on the index (using SPX here)
The green lines are for tops on the Bond Indicator, which often immediately starts a up move on the SPX index. Check it out.
Additionally, I have found that multiple deeper bottoms form an "Egg Formation". And when the last dip into the egg is parabolic down, that often signals a large up move. The best dips down are a sharp stab into the egg. i.e. a blowoff bottom of sorts.
Drop a comment, how do you like this indicator?