Chart of the Day - Monday, April 27th, 2020

Today’s Chart of the Day was shared on Twitter by Louis (@haumicharts). On the left is a chart of the S&P 500 ETF, $SPY, and on the right is a chart of the 20+ year US Treasury Bond ETF, $TLT. Both the Stock Market and the Bond Market are currently testing key resistance levels. Despite the two moving higher together over the past few weeks, Louis points out that one of these is likely to give at this point. Which will it be - Stocks or Bonds? Either way, the resolution will provide some much-needed clarity into the type of risk environment we’re currently in. If Bonds break out to new highs here, it would demonstrate risk appetite for safe-haven asset classes such as Gold. On the other hand, if Stocks break out here, it would demonstrate risk-appetite for more aggressive asset classes.