It seems you have JavaScript disabled.

Ummm.. Yeah... I'm going to have to ask you to turn Javascript back on... Yeah... Thanks.

Effect of 30 Year Bond Yields on NYSE Breadth





Here is a great illustration of the point I made earlier about how NYSE breadth numbers can be misleading because they are now skewed by interest sensitive non-common stock securities (such as bonds, CEFs, munis, etc.).

Here is a chart, courtesy of SentimenTrader.com, which shows the movement of the 30 year bond yield compared to the long term moving average of the NYSE advance decline numbers:

nyse breadth and bond market.png

As you can see, they usually are mirror opposites of each other. When one is making a bottom, the other is making a top and vice versa. Of course, it isn't a perfect correlation because the NYSE isn't comprised of only interest rate sensitive issues. There are still many common stock securities which also have an effect on the breadth numbers. But it is obvious that what we are seeing is a blending of the two forces.

Here is a more up to date chart of the same showing the last 3 years:

nyse breadth and bond market latest 2004 to 2007.png

Technorati , , , , , , , , , ,

Enjoyed this? Don't miss the next one, grab the feed  or 

                               subscribe through email:  

One Response to “Effect of Bonds on NYSE Breadth”  

  1. 1 L.P. Carhartt

    I own the masterdata.com web sites. Don't know if you are aware of them, but we compile historical breadth data, as you use in the example above. If you are doing more work with breadth data, you might find our work very helpful.

    You could do this same comparison with the NASDAQ or AMEX Composites or any one of the other 31 equity indexes and 111 ETFs we compile. For instance, using the Russell 1000 or 3000 would be interesting.

    Anyway, hope this helps.

    LPC

Leave a Reply



Warning: include_once(sk2_functions.php) [function.include-once]: failed to open stream: No such file or directory in /home/traders/public_html/wp-content/plugins/SK2/sk2_util_class.php on line 2

Warning: include_once() [function.include]: Failed opening 'sk2_functions.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php:.:.') in /home/traders/public_html/wp-content/plugins/SK2/sk2_util_class.php on line 2

Warning: require_once(/home/traders/public_html/wp-content/plugins/SK2/sk2_functions.php) [function.require-once]: failed to open stream: No such file or directory in /home/traders/public_html/wp-content/plugins/SK2/sk2_core_class.php on line 31

Fatal error: require_once() [function.require]: Failed opening required '/home/traders/public_html/wp-content/plugins/SK2/sk2_functions.php' (include_path='.:/usr/lib/php:/usr/local/lib/php:.:.') in /home/traders/public_html/wp-content/plugins/SK2/sk2_core_class.php on line 31