Dan Murphy’s SMI Indie Says ‘Sell Bonds and the SPY!’

Dear Traders,
I remember at least a decade ago, there was some blowhard touting that gravity cycles affect the stock market.

Not to be outdone, another guy cooked up a cockamamie hypothesis about sunspots and the S&P 500.

And of course the granddaddy of bull: Elliott Wave theory.

All these ideas had one thing in common: Confirmation bias.

The pyramid guy went on for page after page on all the numerical relationships he found. With every measurement, he became more and more convinced.

Even when it was pointed out that the Egyptians used cubits in their measurements, not feet, the poster wouldn’t listen.

I think he was a few blocks short of a pyramid if you know what I mean.

The way to shed light in a dark room is to do all your testing by computer.

That’s how I discover relationships between the futures market and both the stock and bond markets.

It’s the later I want to talk to you about today.

Long-term bonds went to a sell signal on Monday after a speedy melt-up.

So now both the S&P 500 and long-term US bonds are on a sell signal.

There’s a lesson to be learned from the latest sell signal on bonds so lean in close…

…obey your signals even when the majority of gains went *poof.*

Timing the markets is possible, but perfect timing is not.

Trade smart,

Dan “Prince of Proof” Murphy