scheplick

Show me a chart that matters more than this?

AMEX:SPY   SPDR S&P 500 ETF TRUST
The chart I've created here shows yield on the US 10 Year Treasury Bond. The white line shows its percentage change over the last 12 months.

The red line shows the S&P 500. It shows the S&P 500 over the last 12 months.

What more needs to be said?

The S&P 500 is red over the last year while the yield on bonds continues to rise. REMEMBER: with every increase in bond yield, the risk for things like stocks becomes more difficult. A bond will pay you close to 5%. Apple, on the other hand, will pay a 2% dividend. If Apple does not grow at all, or increase buybacks or new products, or if a recession hits, then the bond yield is indeed the better trade.

The further these two assets widen, the more difficult the trade off becomes.

HOWEVER, that's not to say that stocks and bond yields cannot go up at the same time. Actually, in prior bull markets, they have risen together. If innovation continues, if economic growth continues, and if inflation starts to get under control, we very likely could see this gap shrink in an instant.

I am watching insider transactions to see how much faith top directors, teammates, and employees have in their respective company. Several CEOs have recently bought large chunks of shares out of their own bank accounts. What do this say?

Thanks for reading!

I work at TradingView helping to build charts, tools, and software for everyone interested in financial markets.

Twitter: twitter.com/scheplick
Blog: scheplick.com/
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