#2: Stocks vs. Bonds
Click to Enlarge Futures from the CFTC shows that speculative investors are the most overweight stocks vs. bonds since 2005.
Jason Goepfert of SentimenTrader notes that the relationship between stock prices and bond prices (stock prices high vs. bond prices low and yields high) has moved so far out of normal that the ratio of the S&P 500 and the 10-Year Treasury yield is three standard deviations from normal.
In layman’s terms, that only happens 0.1% of the time.
So it’s rare.
The only other times that bonds have underperformed stocks to this extent in the last five years was back in May 2013 and in September 2012. Both times were almost immediately followed by stock market declines.