SPY : BONDS - temporary swap ?
yeah, great rally since the Mar2009 floor
superb rally since summer 2011 correction (European Club Med crisis)
healthy run since April 2012
splendid performance since mini correction Nov 2012
YES, the DOW30 produced an all-time-high and the media is shouting "the big rotation starting now from Bonds into Stocks" because historically stocks are "undervalued" and cheap vs Bonds. Are they ? 2.01% S&P Dividend yield may look a bit more attractive than 1.96% 10Y TSIES, but hardly a steal. And P/Es are historically cheap.
But if you really want to switch from Bonds to Stocks, this is not the right time, because it is clearly overbought and stretched. Nothing grows into the sky, but money grows on the tree of patience.
This rising wedge on the S&P is screaming for a correction while in the same time the Bonds are producing which lokks like a Bull-Flag. I am not a Bond-fan, but in terms of a temporary switch, I rather take off many chips off my equity table and park them on my bond table.
Later we can always do the "big rotation"... :-)
superb rally since summer 2011 correction (European Club Med crisis)
healthy run since April 2012
splendid performance since mini correction Nov 2012
YES, the DOW30 produced an all-time-high and the media is shouting "the big rotation starting now from Bonds into Stocks" because historically stocks are "undervalued" and cheap vs Bonds. Are they ? 2.01% S&P Dividend yield may look a bit more attractive than 1.96% 10Y TSIES, but hardly a steal. And P/Es are historically cheap.
But if you really want to switch from Bonds to Stocks, this is not the right time, because it is clearly overbought and stretched. Nothing grows into the sky, but money grows on the tree of patience.
This rising wedge on the S&P is screaming for a correction while in the same time the Bonds are producing which lokks like a Bull-Flag. I am not a Bond-fan, but in terms of a temporary switch, I rather take off many chips off my equity table and park them on my bond table.
Later we can always do the "big rotation"... :-)
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