Monday, August 12, 2013

A proprietary Bond Indicator makes a strong case for a correction.

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?


  1. Just moving in to my new "bug in" house. Haven't traded in a month, hoping that refreshes my mojo.

  2. One way or another the next few months should be interesting. Still could go either way IMO.

  3. Sure, I try to do less of being one sided in my thinking.

  4. Looks promising Steveo but in order to have a 1929 style crash we need a blow off top... which to me means 1800-1900 by mid October just in time for Legatus

  5. Interesting pattern Steveo.

    I noticed that TLT and LQD have bounced off some important Fib levels from the last 2 years.

    Something big is up.

    Precious metals set to outperform??

  6. Eh Red, I am just thinking a 6 to 8% correction, not sure when the big one will come.

  7. I'll do the Fear Factor and VOS shortly, could have clues, although I think PM will outperform the indices for the next 5 to 10 years. PS recheck the chart, I added a better one.

  8. I updated the chart, new one is better.


Insightful and Useful Comment!