# Correct interpretation of side-by-side graphs of intra-day fluctuations of stocks and bonds

At the end of the day on Tuesday, February 6, 2018, a snapshot of the Dow and 10 year Treasuries was as below:

At the dip of the stock market on Tuesday, there was also a dip in the yield of the 10-year notes (red line on the images).

I want to know if the following would be a good interpretation:

As the marked plunged in the middle of the day on Tuesday, big investors cashed out of the stock market and sought refuge in the bond market. At the lowest point in the graphs (middle of the day), the yield of the 10 year notes went down as more demand for bonds raised their price. At the end of the day, the stock market bounced back, and the 10 year Treasuries price went down (yield moved up).

I'm explaining it to myself. Basically, I want to make sure that the underlying ideas are not messed up: risk aversion makes money flow from stocks to bonds; this results in a rise in the price of bonds, which, in turn, decreases the yield. Also, not being even close to a professional investor, I wanted to know if the effect (the velocity) is that fast as to almost be able to superimpose both graphs.

• Seems reasonable explanation. But who is your audience ? And only 10 year Treasuries ain't enough. What about others ? A larger data set would be much easier to explain the phenomenon. Commented Feb 7, 2018 at 11:56
• @DumbCoder I'm explaining it to myself. Basically, I want to make sure that the underlying ideas are not messed up: risk aversion makes money flow from stocks to bonds; this results in a rise in the price of bonds, which, in turn, decreases the yield. Also, not being even close to a professional investor, I wanted to know if the effect (the velocity) is that fast as to almost be able to superimpose both graphs. Commented Feb 7, 2018 at 12:18
• Market "interpretations" are just talk, which means nothing. Your "interpretation" sounds as sensible as any you may hear on finance TV shows. You (and nobody else) has the slightest idea why the market went up or down. Commented Feb 7, 2018 at 13:08
• If you look at longer term periods, you'll see that sometimes they correlate and sometimes they don't. Commented Feb 7, 2018 at 13:17