Bonds vs equity

Here's an interesting piece of intermarket relationship. When the ratio of a treasury bond fund like IEF over a broad market index-based fund like SPY is trending up, it's better to be in treasury bonds.  When IEF:SPY is trending down, it's better to be in equities.

To use it as a proper buy-sell signal, it would have to be investigate further and for a longer period, but based on the last 3 years, it looks promising.

Here I am using crosses above and below the 40-week moving average as buy-sell signals. I am considering a cross of the ratio above its moving average as a sell signal for SPY, and a time-confirmed (1 or 2 weeks) cross as a buy signal for IEF.

The green boxes and lines are for IEF, and the blue boxes and lines are for SPY. You can see how the green and blue lines have a more favorable slope than the red lines, which correspond to periods that would be avoided.