I use ITOT as a representation of DJI, DJT, SPX, RUT, COMP added together.
HYG/TLT ratio as longer term measure of fund flow and JNK as shorter term measure of fund flow
1st: using a line chart for ITOT, i can see that the uptrend angle has decreased from 30 to 17 degree.Meaning the price upwards has moving at a much slower rate.
Right before Dec 2013, HYG/TLT ratio increase in tandem with ITOT, which tells us that risk appetite in high yield bond is increase and thereby the same applies to stock. Jan 2014 onwards, i see a divergence between stock price to HYG/TLT ratio. The diminishing HYG/TLT ratio simply means that money is flowing more into TLT (safe haven). Currently HYG/TLT ratio is contained in downtrend channel. To add matter worst, JNK started to give negative divergence relative to ITOT starting June 2014 as well. And it looks to me that a double divergence is developing while US indices are poise to make more new high!
The risk of junk/ high yield bond like HYG and JNK has dwindle simultaneously in synergy while stock price keeps going higher.which scares me alot.
Lastly, i did a wild projection of how ITOT will unfold in near future.And we could possibly having a triple top
HYG/TLT ratio as longer term measure of fund flow and JNK as shorter term measure of fund flow
1st: using a line chart for ITOT, i can see that the uptrend angle has decreased from 30 to 17 degree.Meaning the price upwards has moving at a much slower rate.
Right before Dec 2013, HYG/TLT ratio increase in tandem with ITOT, which tells us that risk appetite in high yield bond is increase and thereby the same applies to stock. Jan 2014 onwards, i see a divergence between stock price to HYG/TLT ratio. The diminishing HYG/TLT ratio simply means that money is flowing more into TLT (safe haven). Currently HYG/TLT ratio is contained in downtrend channel. To add matter worst, JNK started to give negative divergence relative to ITOT starting June 2014 as well. And it looks to me that a double divergence is developing while US indices are poise to make more new high!
The risk of junk/ high yield bond like HYG and JNK has dwindle simultaneously in synergy while stock price keeps going higher.which scares me alot.
Lastly, i did a wild projection of how ITOT will unfold in near future.And we could possibly having a triple top