A helpful indicator for those who follow a systematic long-term investment approach.
What it shows: It shows the 60 Day Cumulative Return of BND Vanguard Total Bond Market ETF against the 60 Day Cumulative Return of BIL SPDR Bloomberg Barclays 1-3 Month T-Bill ETF.
Why: This Indicator will provide you a sense of where the economic environment is at, if the indicator shows that the 60 Day Cumulative return of BND is ABOVE BIL, it means that it's a good idea to go Risk ON in the stock market; On the other hand, if the inverse is true, it means that is a good idea to go Risk OFF in the stock market.
Example Uses: Warren Buffet often advice Investors to just buy a S&P500 index tracking ETF like SPY consistently and you will likely to be making money in the long-term.
With this indicator you will be able to make the Buffet Strategy even simpler: when the indicator shows Risk ON, buy the SPY; when the indicator shows Risk OFF, consider hedges like IEF iShares 7-10 Year Treasury Bond ETF.SPY