Just thought I’d mention the XLF situation according to the TrendX, which uses 3 different signal triggers to generate a consensus signal.(see Mosaic post on Tuesday for more details). We’ll be talking about what these indicators are really showing over the next couple weeks, but astute readers will note the TLT line at the bottom of the chart….so YES! the TrendX is looking at performance correlations and divergences between XLF and TLT. Market Rewind subscribers know that the XLF/TLT pair is a normal default setting on the PAIRS tab, but the TrendX uses a pair of non-correlated algorithms to derive it’s signal…hence the disparity in signals between the MR PAIRS tab and the TrendX. The signal has been premature by 1-2 days 20% of the time over the last 16 months, but the odds are distinctly bearish for now.
