We all know that the risk-on trade often drives many contracts. The key to the trade is the direction of the S&P. It will drive bond prices more than the reverse. The Paratrade fuel gauge for the S&P is designed to give us buy and sell signals. Here is how it has performed over the last few months:
This should be very easy to read. What is noteworthy today is the very low current reading of 25. We need a price hit to elevate fear then the fuel tank can get refilled. We should always be on the lookout for when various fuel tanks align. If stocks have low fuel then we would normally like bonds but we want to see that their tank is nearly full. It currently has a slightly bullish level of 57.