Technician
Short

The High Yield Bonds Market Says it ALL

AMEX:HYG   ISHARES IBOXX $ HIGH YIELD CORPORATE BOND ETF
2176 16 47
The S&P500             is highly correlated with the high yield bond indices. Here is a chart that illustrate this correlation and warn of something major ahead..


For Daily Forex Forecast , forex trading ideas and forex tutorials visit http://thefxchannel.com/category/daily-forex-forecast/
Best Regards,
Technician

Latest trading ideas: https://www.youtube.com/channel/UC02s7uiUQl55HkhHZDM6eUw/videos

Free Telegram Channel: https://t.me/technician_forex_trades

Trading Signals Redefined: https://thefxchannel.com
Excellent correlation! And I agree on the gloomy long term view...
snapshot
+1 Reply
I like the ratio trade. Go long the HYG and short the S&P500, dollar for dollar. Risk 10% to make 10%.
+1 Reply
Thank you Tech! I think there're 2 questions. 1, FRB still in SPX. 2, Which one is more correlated with indexes, DXY or HYG?
Reply
Nice chart, really interesting, thanks for sharing.
Reply
I do believe a very high probability of 50% and probably also 61.8% retracements as shown on this chart.
Reply
BuySellBuySell BuySellBuySell
SPX possible targets
Reply
Stock market down? OR bond market up?? :)
Reply
fraxel BuySellBuySell
I am also monitoring this difference for a long time but two things to mitigate because it is not that straight forward:
first the HYG graph doesn't take dividends into account (neither SPX but difference on average 4% a year div HYG 6% vs spx at 2% which makes not -24% but -8%, I don 't have access to my bloom to do the exact calculation since early 2012).
second now the yield of HYG is circa 7.5% but if one breaks into it, Energy is leading the pack at +14% and Material at +10% rest of sectors are in the 5 to 7% which is not alarming (yet...). better then to look at a widening of other sector spreads.
hunt for yield is strong and willingness of central banks to tighten very weak.
lets wait the spx to take a real stance...
+1 Reply
I dont think yield will be in the u.s. stock markets anyway in the coming years. Probably somewhere else with easier monetary policy and better valuations.
Reply
Technician TOP BuySellBuySell
Well, obviously i think the stock market the one who will go down. This is one indicator, yet many breadth indicators are suggesting stocks will probably go down.
+1 Reply
United States
United Kingdom
India
Deutschland
España
France
Việt Nam
Italia
Polska
Brasil
Россия
Türkiye
Indonesia
Malaysia
日本
한국
简体
繁體
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing Priority Support Ideas Published Followers Following Private Messages Chat Sign Out