Junk/Treasury Bond Signal Going Bearish?

The top panel is junk vs. long-term Treasury and the bottom panel is nominal junk. HYG/TLT is poking below the 200 day moving average today with a support line just below. Nominal HYG is just in a little pattern with some potential to roll over, but it’s still in a full uptrend above the rising SMA 50.

hyg, tlt

Per the May seasonal (courtesy of Sentimentrader) and other factors, we’ve been anticipating a little disturbance in the 2nd half of June. If it were to develop into anything good and bearish for the markets, Thing 1 at the top of the chart above would break down and Thing 2 would drop to and through the SMA 50. So I’m not putting the cart before the horse. But am watching him pull it and watching for signs of labor.

spx seasonal

Subscribe to NFTRH Premium for your 40-55 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com. Also, you can follow via Twitter @BiiwiiNFTRH, StockTwits, RSS or sign up to receive posts directly by email (right sidebar).