Friday, September 25, 2009

Interest rates and stocks II

This is a continuation of this post. Main ideas and original chart is already sketched there.
I wish I had posted this one earlier since is more clear but I got too busy with intraday trading. Anyway, as I said, main idea was already presented before.

What we can see here is how divergences between stocks markets and interest rates are resolved in the direction of the latter. Probably because during the period of divergence, monetary authorities are already seeing what is to come and therefore changing interest rates accordingly. At the present (09-23) we are experiencing one of those divergences and interest rates are pointing downwards....