AMEX:LQD The weeks not over yet but we do like LQD with a double bottom looking for a weekly close of the previous weeks high.
This chart is an inverted chart of the IEF/LQD ratio with a SPX (SP500) overlay line chart Not Inverted . This shows the corrrelation to easing conditions and the S&P500. This is what the FOMC is failing at fighting. With QT and rate hikes, this has only had pullbacks. Jawboning too.
In my last post I outlined the potential of a near-term breakdown of price action as the SPX was moving in a Bearish pennant consolidation pattern, The SPX has now developed into a more classical bear flag continuation pattern. We can see that the downwards trendline is holding price action, and that the bearish pennant has turned into a more typical bear flag...
The chart posted is that of debt in corp market lqd We bounced off the .618 in what looked to be a large ABC DECLINE .But it can also be counted now as wave 5 of 3 down which would mean we would see another leg down to 89. 8 soon
In part 2 I take a quick look at high yield corporates and describe a common mistake made in using ETF ratios to monitor changes in credit risk. Part one and an earlier piece that described how to use the TradingView platform to monitor secondary market credit spreads are linked below. If there is any one thing that will produce a Fed policy a pivot, it is...
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...
A Catch-22 is a problem for which the only solution is denied by a circumstance inherent in the problem or by a rule. This is exactly the problem the Federal Reserve faces. Historic inflation continues to accelerate, becoming embedded into the market's expectations and risking a spiral effect In order to stop rapid inflation, and achieve its mandate of price...
VIX has been spiking with TLT/LQD, but the last few times just seemed to help turn it around. Looks similar to the new year, in orange. Volatility has been exploding, per usual. Every 2 years since 2008, Vix has made a new support 3pts higher, shown in solid white. I just read an analyst saying 18 is likely the bottom for some time. TLT/LQD has also been on a...
I am seeing a collapse in high grade Corp debt based on fib relationships the focus point is all at 117/118 if we break this then I think the whole thing comes apart for everything .
The chart posted you should keep an eye on as we pulled back to support at .382 of the rally from 2020 panic low in 3 waves down ABC decline
The idea is that some corporate bonds will get hurt next days/weeks. Increasing default rate as Free Cash Flow from operations is not growing enough to cover debt service.
Idea for Credit: - Stocks had a bit of a reprieve as China's collapsing property firms were halted for 2 weeks, and China's markets had gone on holiday for Golden week. - Stock market had an unwinding of hedges last week, but are things really 'Back to Normal'? - The bond market does not think so, and seems to be presaging more drawdown to come. - EM High Yield...
The chart posted is give a clear warning of new issues that are close to coming out !
Bonds all across the world, across all different spectrums (from gov bonds to junk bonds) have been rising (their yields falling). This is a signal that there are deflationary pressures and that people are searching for yield in an environment with few opportunities. There are other reasons too, but overall this isn't the best signal. Clearly big corporations and...
Bonds have reached a very important level. For now this seems like a *logical* place for the *anti-reflation* / deflation trade to end, and for the risk on trade to be back. I am more on the disinflationary (very low inflation) camp, however bonds have risen substantially and it might be time to take some profits before the resume lower. I don't think we will have...
Idea for LQD: - Investment Grade Credit possible Head & Shoulders. - Short PT 111. GLHF - DPT
Jaw is getting bigger and bigger.