Junk weekly showing heavy downside momentum but possible red inside candle. The weekly stochastic is turning from over sold. Should see support here (at least short term) before you see it in stocks. Lets see.
The JNK ETF is heading further down with a big bearish Marubozu that is the YTD low -> Bearish for equities.
The IWM ETF is also heading further down for a lower low with a bearish Marubozu engulfing -> Bearish for equities
The DJT ETF ended on a recent low too -> Bearish for equities
The VALUG has a bearish candle for more downside -> Bearish for equities
The...
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...
The JNK ETF looks like it is heading further down still -> Bearish for equities.
The IWM ETF is likely to follow through after closing at a low -> Bearish for equities
The DJT ETF looks a tad bearish too -> Bearish for equities
The VALUG looking to fail support, with a bearish candle for more downside -> Bearish for equities
The TIPS ETF continue down draft->...
As you can see on the main chart, 10y bond yields have broken above their downwards channel and are now back at their 2013-2018 highs. Based on technical analysis we don't have a confirmation that the trend has fully reversed until we get a close above 3.2%, but we are pretty close to breaking above that level too. Now we aren't only seeing the 10y yields rise, as...
The Nasdaq 100 is closely correlating to a number of Instruments - LQD UUP (DX< DXY) and TLT.
JNK to a lesser degree as well.
TLT has served to be the better of these corollaries.
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I am waiting for a capitulation even in TLT with 10-year yields reaching 3%+ to 3.265 as the...
Very quickly before the market opens...
The JNK ETF is heading further down for lower low -> Bearish for equities.
The IWM ETF is likely to follow down continuing the candle -> Bearish for equities
The DJT ETF broke support -> Bearish for equities
The VALUG failed the resistance, with a bearish candle for more downside -> Bearish for equities
The TIPS ETF gave...
I have Swing short signals all over the place. SMH, IYT, and XLI leading markets lower to start the Quarter here. The Russel had a real bad day today as the credit markets (junk bonds) are tanking once again. Even Energy looks to be resetting lower.
With the current global situation where there are day by day developments, the Leading Indicator panel offers similar dichotomy...
The JNK ETF is heading further down -> Bearish for equities.
The IWM ETF is likely to push down in a somewhat limited fashion -> Bearish for equities
The DJT ETF appears to be bouncing up -> Bullish for equities
The VALUG looking for...
I plot BLX (which is BTC) along with JNK/TLT ratio.
JNK/TLT ratio is (Junk Bonds ETF) / (20 year bond ETF ) . This ratio can serve as an indicator, to show if the market is loving risk or loving safety on a macro level. Risk on to risk off ratio. You can see that the JNK/TLT ratio correspond with market bull & bear cycles. Notice the JNK/TLT tops form a trend...
I will say it again. Caution in all asset classes remains. How much risk are you taking on for how much reward you are expecting to acquire?
Keep asking yourself that question. Better to be out of the market wishing you were in rather than being in the market wishing you were out.
Back on Jan 5th, 2022 I posted that junk bonds were breaking key area.
One month later it's collapsing as expected. This is very bad for Zombie companies
as their borrowing costs rise without pricing power, how will they deal with rising
unit labor costs and raw material inflation?
Interesting... in the last couple of weeks, as the Leading Indicators signaled a retracement, it appears that it may be time for a technical bounce...
JNK broke down as expected, and exceeded target. Last week's candle had a long tail recovery, and this current week is forming a rebound.
MACD still in bear territory.
IWM, DJT and VALUG all seemed to have...
Junk bonds are one of my favorite indicators for stocks. The week ahead will be critical for JNK. A solid breakdown in junk could be the catalyst to see stocks much lower. Lets see what happens.
Reviewinig the Leading Inidcator Weekly panel...
The JNK has a Sell signal, retraced and may break down to a lower low target, as previously expected. Not yet happening, but with a lower high, the bias is closer to the downside.
The IWM (Russell 2000 ETF) also has a Sell signal and lower high. Waiting for a lower low confirmation with a break of support.
The...
Leading Indicator panel update:
JNK - the topping pattern continues to play out for JNK, looking for a lower low, after the last lower high.
IWM - The Russell 2000 ETF failed a breakout late last year, and is about to break down of a support given the bearish weekly candle.
DJ Trans - a system Sell signal, and likely downside off the Dark Cloud Cover...
