I try to imply strength or weakness for the stock market from non-equity charts that appear to be either highly correlated to equities or have a high inverse correlation to equities. These charts are especially useful when equity markets are hitting new highs and therefore have no local reference levels. As SPY pushes out to a new high the following three charts should be monitored. Where price is relative to the levels shown has an implication for equities in my opinion and will give us a clue re whether the market rally can be sustained further.
EURJPY, a highly correlated chart to SPY, is in a ST weak price location. Price printing time above 141 would be a stronger price location and a further positive for equities.
Financial ETF, XLF, is probing above major Resistance today . Price printing time above 22.0 would be a stronger price location and a positive for the general market. Potentially this chart could fail here.
TLT (T-bond ETF), is inversely correlated to SPY but currently holding a strong price location. If it can maintain its position above 106.34 it suggests strength for this chart which could be a negative for equities in the longer term.
