Stock Market Flash Crash Alert
SPX has officially crossed its 50-day moving average. Usually Flash Crashes occur after the 50-day is retested from beneath and turns down. A minimal Flash Crash would likely take SPX down to the lower trendline of the weekly Ending Diagonal. From there, SPX may bounce back to mid-Cycle support/resistance at 1567.80. This could be a busy week.
2.85% and raising
Gross: “No More QEs? No More Bull Markets”
Gross: 3 to 4 percent credit growth can’t produce much more than 3-4 percent increases in asset prices. No more QE’s? No more bull markets.
“Junk Bond Bubble” about to break? Key situation at hand for them!
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“I Love Junk Bonds” for several reasons! They are awesome total return tools when the trend is up and they provide quality “leading signals” for the macro economy. Speaking of total return, the chart above reflects that the Junk Bond Total return index is up 9-fold since 1990!
Is a bearish rising wedge in place in the Total Return Index? Is a bearish and dangerous “Eiffel Tower” pattern in place too?
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The chart above reflects that two of the largest Junk Bond ETF’s could be at very important levels right now. JNK on the left is testing support after breaking lower out of a bearish rising wedge and HYG is actually breaking support.
The lower inset chart reflects that junk bond yields are near the lowest in history and have formed a bullish falling wedge, which suggested higher yields should take place and push junk bond prices lower!
Lower junk bond prices are often followed by declines in the stock market. Use these assets to help with your portfolio construction and make your better overall returns.
Dangerous divergences unseen since 2007
CHAPEL HILL, N.C. (MarketWatch) — You can’t say that the stock market isn’t giving us plenty of warning that downside risk is both high and rising.
The latest big warning comes from the failure in late July/early August of the NYSE Advance/Decline line to confirm the stock market’s new highs. This non-confirmation is potentially quite worrisome, according to several of the market technicians I monitor, because it means that an unexpectedly few stocks were participating in the broad market’s march into new-high territory.
From the perspective of this non-confirmation, the stock market’s decline over the last couple of weeks is therefore not a surprise.
The NYSE Advance/Decline line is calculated by taking the number of issues that rise in price on a given day, and subtracting the number that fall. This net number is added to the cumulative total of prior days’ readings, resulting in a historical data series.