Ratios to Reason $SPX
In an effort to create more structure for this blog, I’m re-posting 5 charts that depict various trends within the $SPX. In the future this selection will be posted during the weekend.
$SPXHILO:$VIX = 10.9
Why am I regurgitating this mass of pretty but confusing information? The charts represent aspects of the market that are not revealed by the price of the SPX. 3 of the 5 graphs relate percentage:volatility, and currently they are bearish, trading in downtrends towards 0. If you’re buying stocks, it’s prudent to wait for a growing number of bullish stocks trading above the 50dma making new highs.
The other two illustrations are a bit more conventional. One measures the spread between a buy write strategy and the underlying index, creating an inversely correlated derivative of the SPX. Lastly, $CPMKTE:$CPMKTB is the relation between US Equities and US Bonds, useful for discerning the appetites of investors. Both of these indicators are signaling more downside to come.
In time, I hope to find a better method of aggregating the information presented in these graphics. Any suggestions towards such an end would be greatly appreciated.