I see the BOJ dumping treasuries this summer, which'll force down the USDJPY pair, and increase inflation here at home. When rates go down, borrowing money is easier, especially for junk corporations avoiding default due to decades high interest rates. Could AMEX:HYG fall back into the box one last time? Absolutely, if the dollar ticks higher after FED...
Back in November of 2022 I wrote about using the HY-IG spread as a potential indicator of 'risk on' vs. 'risk off' sentiment and I will insert that below for readers trying to understand how this spread differential can be utilized. Subsequently I will explain what I currently see emerging on the above chart with the addition of both the RSI and correlation...
$HYG looks like it's about to fall. There's a H&S pattern forming on the 4Hr timeframe and price just rejected the 200DMA. Should price break support at $73.05, I think we'll see a quick move down to the $69 region, maybe even lower. I've taken some puts just incase this plays out.
The Corporate bond market got extremely oversold and it bounced without the Fed having to pivot. Essentially the market got to 2013-2018 levels, and bounced nicely at the old support. But we still don't know whether the bottom is in or now, as there are more questions that need to be answered, like: Does the market expect the Fed to reverse course soon? Does the...
We have seen this movie before. High yield bonds work as a good proxy for risk-appetite in the market. Using a simple trend filter, we see clear warning signs developing. Question is - how far will this go?
Hello traders, Description of the analysis: The ETF market for high-yielding corporate US bonds is currently in an important support area that was until recently a resistance. Resistance turned into support with a highly volatile upward movement supported by high volumes. This is a clear signal of a growing willingness to invest in riskier assets. This zone has a...
Its clear that coronavirus will have a significant impact on US life, and as a result the US stock market. Due to the fed acting as a support buyer, there is now a ground floor for markets. However, the fed will not prop up failing businesses, rather it will act as a last buyer so we don't see a financial system collapse. This means that while the fed is injecting...
JNK has stalled at major resistance. The current trend is down so a reversal here should be interpreted as a resumption of the prevailing trend.
As can be seen on its weekly chart, the $HYG appears to be sending a warning signal. On a technical basis, a "Shooting Star" pattern has emerged, coupled with negative divergence in the SMI and RSI indicators. To us, it appears that high yield bonds are sending a signal that its rallying may be getting a little stretched. We would caution investors to tread...
NOTE : The low risk trading area reamains higher in the context channel (the gray ribbon) but we're signaling overbought on the trendchannel... This may be a concern if the market reverses here... Cause reversing on trendchannel means there will pbly be a trend trade to come right after... Not the best case scenario for stock though if junks were about to break...
Credit markets have gone crazy... history repeats itself. Look at this insane surge for the junk bond market.
The past 5 times JNK has dipped below its 200MA it has recovered. Also has support from trendline.
Today we added a couple shorts, I'm posting the trades we currently have open but not providing entry/stop suggestions. Only trade them if you have a trading strategy, or, ask me if you're interested in learning more about the one we use (Tim West's 'Key Hidden Levels' and 'Time at mode'). We have some worrying bearish signals, so it's a good idea to have a...