Critical time

ByStander

The spread of TNX and SPX has never been so big in the past 10 years.
When the yields on treasuries and the price of stocks diverge too far there is generally a sharp reflex correction at some point. There are three possible outcomes
1. Stock prices will collapse as they did in 2008 to catch up with yields;
2. Yields will rise as they did in 2003 to catch up with stocks;
3. Both stocks fall and yields rise to meet in the middle.
Time to take sides...

blackrock

Good to know. Thanks.

babyruth

ranchgirl

Critical time
The spread of TNX and SPX has never been so big in the past 10 years.
When the yields on treasuries and the price of stocks diverge too far there is generally a sharp reflex correction at some point. There are three possible outcomes
1. Stock prices will collapse as they did in 2008 to catch up with yields;
2. Yields will rise as they did in 2003 to catch up with stocks;
3. Both stocks fall and yields rise to meet in the middle.
Time to take sides...

ByStander 发表于 2010-10-3 16:15

I don't quite understand the meaning of spreads:
1) This is relative coordinates? If you move one of them y-axis zero point or scale a little, the results would be totally different.
2) from the chart, I do not see "Yields will rise as they did in 2003 to catch up with stocks"

Thank you!

ranchgirl

Read again, I got a little sense, they use the max/min of both as the scale and zero points.

PQ168

谢谢！请教除了TBT 还有没有杠杆更高的？

ByStander

谢谢！请教除了TBT 还有没有杠杆更高的？
PQ168 发表于 2010-10-3 18:07

    不太清楚，TBT options may be?

PQ168

TBT option跟TLT option似乎差不多

hutong123

leftright

atrader

looks fine to me. the trend is like this. as for mean reversion, you may compare TNX to yied of SPX, not to SPX directly.

在水一方

fall2008

slcgh

colderdown

仓位（屁股）决定脑袋：

“3. Both stocks fall and yields rise to meet in the middle.”

jingriver

Fed want to keep the low interest rate for a while, that's what the QEII for. So stock market will take a dive.

328

2003 is the year from bear mkt to bull mkt, while 2008 is in the bear mkt. Now? dependent on what time frame we look at. I know I say nothing.

babyruth

Yes, I see big move coming.

shoujie

The spread of TNX and SPX has never been so big in the past 10 years.
When the yields on treasuries ...
ByStander 发表于 2010-10-3 16:15

哈！

1）IS THE EASY WAY ！