The key themes going into next week will be stimulus. The update from the federal reserve this week they showed they are purchasing high quality corporate ETF's (a new asset class for them) and amongst the ETF's being purchased was LQD . As you can see, it clearly benefited. For some that have been in the game for a while, front running the FED has never been our...
May be looking too closely into this, but the 4hr ratio chart is breaking out from diagonal resistance and the RSI is forming a new high, all while not reaching oversold..
I know, dont find the Fed. But I was looking at this least week too and wondering how in the heck is it going to hold up. Trying to give it the benefit of the doubt: maybe bounce after the gap filled.. but so far does not look like it. Definitely one to watch at least for informational purpose if not to sell
Corporate debt is overvalued, propped up by the Federal Reserve
Bought some puts expiring end of May, hopefully the timing is right
Short term bearish, long term FED is op / not worth tryna short it to the ground
Short description:
Similarities between the 2008-2009 AMEX:LQD pullback and the 2020 AMEX:LQD pullback, paired with the subsequent snap back rallies from a technical standpoint. Looking at the comparisons between the two, the 2020 correction was about the same depth, however, the structural components of the correction were fundamentally different.
2008-2009...
We can observe a symmetrical triangle.
Depending on where the triangle breaks we will open a short or a long one, in this case the two operations are left on and as soon as one is activated we cancel the other, the profit taking we put it with the projection that gives us the triangle and we also put the stop loss.
Remember that it is possible to play a certain...
LQD just bucked a very important trend line. If investors have indeed lost confidence in corporate debt and we see follow through, then I see this as a bearish signal for stocks too. Typically the bond market is known to be correct over the equity market as large institutions with more knowledge than retail traders deal with bonds directly. To see corporate bonds...
This spread has been a good buy indicator when it hits this level. The problem is that stocks have gone up instead of down on this spread rise. is it different this time?
As inflation (measured by the CPI) accelerates into the back half of 2019, compression of real rates along with decelerating corporate earnings will put downward pressure on investment grade credit.
Last Oct I published a series of charts named “The preponderance of evidence”, I think it is time for a new series. I think the charts itself should be self explanatory. Feel free to drop me a line on what you think.
When 50% of IG bonds are BBB rated, 1 notch above junk, are you sure you are getting what you think you are buying? #lemonalert
LQD which tracks BBB-rated corporate bonds is reversing at the top of a a channel which started in 2012 when global central banks launched their QE forever campaign (Twist, Whatever it takes, ETF buying etc). You can see LQD break below a SSR near the top of a channel with negative short-term trend.
Lots of reasons to be bearish for corporate bonds, higher...
LQD
