Tuesday, December 27, 2005

Finding a floor


Last week, it looked like a possible bottom was set. Tuesday's intraday reversal threatens to start 2006 ominously. While today's close barely broken down past last week's close, the SPX:TLT ratio sliced below its recent range. This suggests that money is flowing out of SPX and into tlt, a defensive play indicating a bet on recession...especially as the yield curve is getting inverted.

 

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