Vix, MMTH, and Junk bond yields trade along stocks to add color to this movie.
SP500 stocks are businesses with earnings yields that grow over time, but stock dont trade alone in a vacuum.
Investors can choose to get in, get out, sell puts, buy bonds, or stain short term money market assets.
if we look back at history, we can also compare what different risk...
CNN business has a wonderful fear and greed indicator. I love it. So I made my own version to track real time sentiment. Im using junk bonds prices - vix volatility to mimic cnn's version.
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This is the ratio of High Yield Bond ETF to the 20Y T BOND. Not a ratio seen a lot but on the 1M time-frame it provides some perspective to the periods of high volatility/ correction on stocks. The blue trend-line is the Dow Jones (DJI) index (stocks). As you see, every time the JNKTLT ratio hit its Lower Highs trend-line, stocks have turned sideways at best,...
The FED's monetary policy is a lot like that scene in the Wizard of Oz where they think they are communicating with a great and supremely powerful wizard, but Dorothy's dog incidentally pulls back the curtain while sniffing his leg. To the disdain of Dorothy, Tin and Straw man, it's just some goofy looking guy pulling levers and talking through a loudspeaker while...
10-year treasury yields technically look set for a move higher after completing an ABC corrective pattern last week. The overbought status of the stochastic and the RSI indicators also point to a move higher.
The dollar and treasuries will however be at the mercy of the Fed this week.
Weekly candle:
LQD has just had 4 consecutive closes below the 21 ema, this may well be a sign of weakness in an already overextended market.
As you can see, LQD and the SPX have had a very tight correlation, particularly since the liquidity hose was turned on after the market crash in March. This is why a selloff in the bond markets, may very well forewarn of a potential...
Trump is meeting with bank CEOs today to discuss how to support small-cap companies with large debt burdens. The high-yield junk bond market has been bleeding lately because many of these bonds are expected to go into default later this year. However, if Trump's meeting produces some kind of stimulus or bailout, we might see this market rally. Cheap March 13 or...
See M. El-Erian last articles about credit quality erosion.
US market has near 5 trillion of A grade and BBB bonds.
Economic shock may cause downgrade of these bonds to junk levels which will launch sell-off of these 5 trillion papers.
So we take Ishares quality bonds ETF which includes only AAA bonds (QLTA) and deduct from it performance of Ishares ETF which buy...
Expect a red week this week as the SPX plunges toward 2700. Odds of a recession by November have climbed to 62% on the PredictIt prediction market as Russia and Saudi Arabia kick off a price war in oil and gas. As oil and gas prices fall, the risk of upcoming defaults on high-yield corporate "junk bonds" increases greatly. That puts the banking sector at risk,...
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...
