New Trading Systems - Think Tank

[skidstreet]

You know I hadn't looked at that chart in a while but looks like it's still working pretty well. I never did have an absolute trigger point but most bounces came when the ratio dropped below .1820, right in the range that it bounced this time. The problem is that TLT pays a monthly dividend and stockcharts subtracts this from the price which skews the ratio overtime [I wish they wouldn't do that]. So when you look at this chart from last year it appears that the bottoms came at higher levels but nope, all the bottoms on the ratio were between .1820-.1800. I don't think I'd use this as a stand alone trading indicator but more to tell us when stocks, bonds and dollar are at extremes and to look for reversals.



http://stockcharts.com/h-sc/ui?s=UUP:TLT&p=D&st=2011-07-23&en=2012-01-10&id=p30122314444