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...
In my previous LQD study I outlined a possibility to use the LQD as a leading indicator for equities. Looking at the daily chart a few weeks later we can see that the price is within a well defined wedge. Perhaps, the next week will bring a test of the wedge boundary. If there is an impulse breakdown it would be worth watching its effect on the direction of...
LQD is an ETF that tracks investment grade corporate bonds.
In this study I compare the LQD with SPY that tracks S&P 500 index. Upon review of turning points one can conclude that the corporate bonds start to go down first and recover first hinting the broader market...
From a quick look at the US Bonds (LQD as a proxy) and US Equities (SPY as proxy) price ratio, it seems like money is moving slowing moving back into bonds at the moment. This is most likely due to the poor global economic data that has come out in recent weeks.
Time will tell as to whether or not this trend continues. But for now, bonds seem to be the asset of...
I don't just mean for Investment grade bonds. This will have a profound impact on $spy as well.
Co's have been borrowing cheap to buy back stock and issue dividends. This manufactured earnings
era will come to an end. Without buybacks, the market will struggle. We will see a recession again,
probably withing 12-18 months. How much forward demand has been...
- just a rough idea, if credit started to widen and back to 2016 level .. SPX still a lot more room to dive
- it will be more than systematic issue if credit get worse
- Bull has to fix the market asap as both LQD/HYG is nosediving now