Credits: Tom McClellan HERE + HERE |
[...] With a divergence now in place between the DJIA and the Bund-Treasury spread, we can have a reasonable expectation that a bear market for stock prices should ensue. If it plays out like the last two, the bear market should last until the Bund-Treasury spread gets back down at least to parity, or preferably even lower. That could take a while; in the 2000 and 2007 examples, it took a couple of years. The eurodollar COT leading indication already tells us to expect a downward trend until April 2016, so that gives us at least several months to see how the Bund-Treasury spread behaves.