Trouble On The Horizon
SPY & DIA holding up, but the breadth and volatility of the NASDAQ feels ominous.
We haven’t seen this kind of action since July 2015, about a month before a memorable flash crash.
Broadly speaking, when the blue line rises above the red, stay long stocks (SCHB). If red gets above blue, favor bonds (SCHZ).
Despite the recent warnings by Mr. Greenspan, this model currently favors high quality credit over technology equity till the smoke clears.