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JNK

Leading Indicators Reversal Still BearishThe 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-> Bearish for equities The TLT ETF is still diving -> still not seeing any flight to safety. The VIX just broke out above the trendline -> very Bearish for equities The HG1! copper futures downtrending Overall, rather Bearish bias on equities
TVC:VIX
by Auguraltrader
Bond yields in the era of high inflationAs 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 all kinds of maturities are rising at the same time and are rising pretty fast. The trend is showing no signs of exhaustion and this could get pretty ugly for the world economy, as the Fed has barely raised rates so far and they are threatening to raise rates by 0.5% at every meeting in 2022. Many analysts claim that the bond market is broken and that yields will rise even further, but are they correct? Well the truth is that the way bond market topped (yields bottomed) in March 2020 is definitely an indication that a bull market is over. Currently the market has broken below most major support lines and seems to be accelerating rather than decelerating, while the correction from the peak is indicating that the bull market is over, as during bull markets corrections tend to stay within a certain range, and this correction is way larger than any previous corrections. At the same time the 2y year yields are above 2.5%, a level that they 'shouldn't' have broken if the bond bull was intact. The reason behind this is that usually 2y bond yields would never go above the peak of the Fed Funds Rate and during the last hiking cycle the FFR had peak at 2.5%. Currently the 2y yields look like the formed the perfect round bottom (bullish technical pattern) and have broken above their downwards channel and could also be headed higher in the medium to long term (an indication that the bond bull could be over). However not everything is really bearish for bonds at the moment and there is some hope for the bull market, even if that means we only get a strong bounce before going lower. As the 10y and 30y yields haven't broken above their resistance levels yet, it might be a good time to start buying bonds. Why? Well as yields are at resistance, bonds are close to support. The actual bonds are so oversold, that the current move might be getting totally irrational. Yes inflation is going up, yes inflation could go higher and inflation expectations keep rising, but the rate of inflation could come down. Not only that, but the Fed is so trapped that everyone knows they can't really raise rates much more or sell bonds without breaking the market. Financial conditions have already tightened so much, that investors will eventually run to the safety of bonds which finally have a pretty attractive yield. Of course my reasoning doesn't just rely on some random fundamental analysis, but also some technical factors. The first one has to do with how this break of the trendline could be a trap and this move is headed straight into a very important area in which there is strong support. On TLT there is a major gap at an area that was support, it was broken and then the market quickly closed back above it. That's the perfect place to go long. The second one has to do with the fact that the yield curve had inverted and has now un-inverted itself. Usually inversions happen close to the bottom of the bond market (peak in yields) and therefore this could be another useful signal that a bottom isn't far away. Again this doesn't mean that someone has to go long right now or go long big, just that maybe its time to cut down shorts and put on some small longs. Personally I like to move between being a bond bull or bear based on the data and not have dogmatic views about what will happen in the future. Finally I'd like to talk a bit about junk bonds, which are at the same level they were when the Fed had raised rates at 2.5% and kept saying that they would keep hiking. With so much debt in the world, the Fed threatening to keep hiking rates and the global economy being in shambles due to Covid-19, aging demographics, supply chain issues, lockdowns in China, the Russia-Ukraine war and commodity shortages, it is hard for someone to really see how owning junk bonds is a good long term bet here. Shorting junk bonds is probably the best bet someone could take at this stage, if he/she believes that there is going to be a major collapse either in the stock market or the bond market. What I find very interesting is how resilient American companies have proven to be, and how after so many major crashes since 2008, now junk bonds are rallying against treasuries. By looking at the HYG/TLT ratio, we can see how they have outperformed since the March 2020 crash, potentially due to how much the US government has support those companies and how much more the private sector has benefited from low rates and money printing compared to the public sector. By adding to the mix how strong stocks have been over the last 2 years despite all the negative events, we can make sense of why junk bonds are outperforming us treasuries. Maybe this is also a major sign that buying stocks is a much better idea in the long term than buying bonds, and that the stock bull market is still intact, but that's a topic which I will discuss in another idea. In conclusion, the bond bull could be over. There are several signs indicating extreme weakness in bonds as inflation expectations keep rising and the Fed is unwilling to support the bond market. Yet we are at levels that not buying bonds seems like the wrong decision, even if buying them would only for a short time period only.
TVC:US10Y
by BitcoinMacro
NQ CorrolariesThe 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. ____________________________________________________________________________________ I am waiting for a capitulation even in TLT with 10-year yields reaching 3%+ to 3.265 as the potential High. This would serve to drive the 20 Year ETF to a flush down low while providing a similar washout for NQ. It would need to happen this week, perhaps earlier than later. TECH is the weaker component relative to the ES and YM, the RTY is trading on its own and leading the drive lower - although it may be consolidating in this tight range, a breakdown would imply 16x' below 1911. This would be very bearish and reduce the probability the Indices have put in a Sustained Low.
CME_MINI:NQ1!
by HK_L61
Leading indicators are BearishVery 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 up and gave way -> Bearish for equities The TLT ETF is looking for a non-existent bottom -> no flight to safety. just gave way, period. The VIX just broke out and checked in at the support... spiking up soon? The HG1! copper futures stalled at resistance. Overall, Bearish bias on equities
COMEX:HG1!Short
by Auguraltrader
Leading Indicators messyWith 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 more downside -> Bearish for equities The TIPS ETF is spiking after a gap up, bullish for TIPS -> Inflation is exploding! Ususally bullish for equities, but in this instance, not likely. The TLT ETF is bottom feeding, and there is a MACD bullish divergence -> this suggests that the fear is not yet great enough for a flight to safety. Not yet. The VIX just broke out of a trend line and is pushing towards 45. The HG1! copper futures suggest an anomalous accumulation of copper, maybe forerunning the equities market upwards, but otherwise, if a general reflection of commodities rocketing in prices. Overall, Bearish bias on equities, with the chance of a quick rebound soon... but not before a spike down first. Totally tied to the Russian Ukraine events for now.
COMEX:HG1!
by Auguraltrader
BTC and JNK/TLT ratioI 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 line, and have some correlation with BTC tops - though not to the exact day or week. I used the green box to mark a kind of fuzzy area, where the JNK/TLT did not top at the same time as BTC. Notice the end. Will it touch the trend line as BTC tops out? Or Is it possible it plays out like the green box range, where BTC tops, and the JNK/TLT dances along underneath the trend line a bit further, because the stock market hasn't finished its run yet? Or did BTC top at $69k already? Make your own conclusions. I'm in alt coins. :-)))))) Green lines indicate JNK/TLT tops and red lines JNK/TLT bottoms. I then drew them up to BTC looking for correlation. I learned this chart from "Game of Trades"
AMEX:JNKLong
by gz1968
Leading Indicators Reversal in ProgressInteresting... 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 retraced hard, and bounced off a support. MACD crossed and still in bear territory... may not be over. sus. TIPS failed a support and does not seem to be recovering, not bouncing for the matter. MACD appears to be recovering though. This one is rather odd, so I would just note and leave it for now. TLT is not bullish as one would expect it to be. In fact, it looks bearish, which is favorable (bullish) for the equity markets. VIX failed a solid break out and looks to be finding 16 again, signalling the interim volatilty is over and more bullish markets to prevail. /HG Copper futures are held in a tight range and appear to be recovering this week - if it can hold steady and break out. MACD is not yet bullish. Overall, the leading indicators are signalling an interim bottom. perhaps a larger than expected rebound should follow in the coming weeks...
AMEX:JNK
by Auguraltrader
1
Leading Indicators not bullish, slow deterioration observedReviewinig 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 DJT is also similar. The Value Line failed to close the recent gap, suggesting downside bias. The TIPS clearly broke down through two support levels with a system Sell signal. So this one committed. All the above have MACD technically bearish bias. The TLT is oddly breaking down too. No comments about this at this point of time. Just unusual. The VIX is also unusually complacent, being <20. Technically seeing a possible spike some time in the next two weeks or so. I just added the Copper futures in the panel... according to Russell Napier, Copper futures is also one of the leading indicators we can use. For now, it is ranging and not committed to any trend. I hope we get some committed trend soon! Stay safe!
COMEX:HG1!
by Auguraltrader
Leading Indicators point to more the obviousLeading 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 pattern. Value Line - Similar outlook to DJ Trans, with bearish candlestick that failed to close the gap. TIPS - Totally bearish Marubozu that broke two supports, with MACD bearish. This market forerunner is not boding decisively bearish. TLT - Instead of the expected bullishness in a bearish market, we see TLT being dumped with a gap down marubozu. VIX - still low, coiling to spike perhaps? ES1! - The S&P500 futures had a Bearish Engulfing last week... indicative of a follow through downside in the weeks to come. So... the leading indicators overall are bearish, and getting more so, with the S&P500 just became indicative of some real retracement potential in motion.
NYSE:DMT
by Auguraltrader
Leading Indicators are BURNTAs forewarned, the Leading Indicators were previously pointing to a burn out, and now half of the leads are burnt. JNK and VALUG are bearish, as are TLT and VIX indicating bearishness. IWM, TIPS, and DJT have failed any bullish indication, skewing towards bearishness. The S&P500 futures are at support now... likely to break down, even for the beginning of a month. Overwhelmed by the "shock" of a new variant, perhaps it is time. IMHO, Omicron is a precursor... it should be mild, but its existence is indicative of the next wave. So, not to be ignored, and especially not to be forgotten. This is like Nature's forewarning of 2022. Stay safe!
CME_MINI:ES1!Short
by Auguraltrader
1
Credit - The Second Wave - EvergrandeIdea 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 has been in capitulation, while US Corporate bonds and HY are accelerating their declines. - High Yield Spreads are about to breakout. - This is a problem that has not simply gone away, but rather will only get worse. - Nikkei had even erased all losses of the year in 2 weeks, then lost them again in 2 weeks more, to continue its bear market: - Remains to be seen how far-reaching the effects will be on China's 5T property market. The drag on global property market is real: More to come on that later. The stock market has its best days in bear markets as volatility increases, and this is really telling of the situation. I think we are already in a global bear market and recession. 110 1911 222 GLHF - DPT
AMEX:LQDShort
by UnknownUnicorn1043646
1
S&P500 - About time for a proper retracement??Am just looking at my panel of leading indicators, and besides the S&P500 ES1! daily chart looking a bit stalled with MACD turning down, the Russell2000, DJ Transports and Value Geometric Index are already leading down. Key levels to breakdown are in red circles. Some others like the High Yield Bonds and TIPS are still holding; while the Treasury Bonds are being snapped up (Risk Off mode) Volatility is low, waiting for a breakout. Looks like a storm is brewing...
CME_MINI:ES1!Short
by Auguraltrader
6
Volatility - Do Not Resuscitate - Evergrande (VIXplosion)Idea for Macro: - Free money is cut off at the source. China Credit Impulse turned negative > Evergrande is first to fall > Overseas investments downsized > widespread effects. - China was the only productive economy in 2020 > driver of global economy (60% importer of oil). - CN30Y is closely correlated to CCI > leads US30Y > leads US risk assets. - Chinese Central Bank POC draining liquidity from the system (Injects 10 bn yuan via RRP while 30 bn yuan expires). - China HY leads down > US HY/Junk goes down > NDX goes down: - Currency showing strength: When you see currencies, bonds, and equities rising together, it means normal correlations have fallen apart. Typical before a crash/crisis type event. CCI is the leading indicator. Will see a VIXplosion. GLHF - DPT
HKEX:3333Short
by UnknownUnicorn1043646
4