Junk and high yield corporate paper, with their HYG and JNK ETF’s as proxies, both indicate the persistent weakness in the riskier parts of the fixed income markets.
Back on July 30th, I wrote this post titled, “Don’t Mind This Junk Buried in the Trunk.”
Here is what i wrote:
As far as divergences and correlations to equities go, it won’t matter until it does, and then everyone will point to it in hindsight as a warning sign.
More on this in a bit.
Drop me your top afternoon trades.
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The red we are seeing this morning is looser and more forceful than what we have seen in a while.
As evidence, look not further than the sheer size of the daily chart price candlesticks of the major averages. They have increased noticeably in recent days which, typically, indicates a correction is nigh. Of course, this teflon market has always shaken off those kind of warning signs.
But the action today sure is not friendly longs and yesterday’s dip-buyers.
I am back in full cash and, ideally, waiting for secondary short entries in a bunch of equities and indices.
Gold and its miners are bouncing today, but I would still prefer a more textbook bottoming setup there.
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The whippy market continues, as yesterday’s lows on many issues ought to hold if bulls are going to stage another rally to fresh higher.
I am keying off Apple this morning, with respect to the QQQ ETF. Seeing as Apple is such a big part of the ETF, note the potential breakdown on the daily chart, below.
We are likely to see further choppy and gaps either way until a name like Apple loses its 50-day moving average (dark blue line), where the selling would likely intensify.
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The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out) which I published for members and 12631 subscribers this past Sunday.
Nonetheless, these conditions can continue to persist, with indices grinding higher and participating waning.
Long ideas such as PANW TWTR, even GPRO MBLY are on the radar for traders seeking out momentum in what amounts to threading the needle in this market. Note the firm setups on their daily charts, below, if they see further strength this week.
Please click here to continue reading
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For you night owls out there, feel free to drop me any market/trading-related topics you would like me to cover in a weekend video.
In addition, anything else about the current market, feel free to drop below.
Speak your mind, night owls.
https://www.youtube.com/watch?v=Ur8rBhREsAU
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After a few false bottoms along the way, now may be the time to try an energy sector long for a snapback rally trade.
On the daily chart for the sector ETF, below, note the very high volume reversal on Wednesday to accompany the long-legged doji variation at the 200-day moving average. I would keep a stop-loss under $91.
ERX is the levered long instrument.
Also note the high buy volume upside reversal in crude oil itself.
Drop me your top tickers overnight.
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