US Treasury bonds are worse than Junk

Junk bond ETF outperforms both Treasury and ‘investment grade’ (IG) bonds As would be expected, nominal junk (HYG) is pretty bearish along with the rest of cyclical/risk ‘on’ markets. It’s in a 2022 daily chart downtrend. With the tiring inflation story still eating away at Treasury bonds, it’s logical I suppose that Junk is strong in relation to T bonds. But what of Junk vs. … Continue reading US Treasury bonds are worse than Junk

Credit Spreads ticking new highs for the cycle

High Yield spreads are elevating And the message is not a happy one for the risk ‘on’ world, which is most of the investing world. Combine it with Gold/Silver, Gold/Copper and even Gold/SPX and you have a recipe for more pain; lots of it despite any bouncing the markets may do. And despite the fact that gold has not even gotten off its ample butt … Continue reading Credit Spreads ticking new highs for the cycle

Relief, in the form of credit spreads

High Yield credit spread eases On March 15 we noted that High Yield option adjusted spreads were rising, which was a distinct economic/financial negative if it were to continue. It did not continue. Along with the recent market rally the High Yield index spread has pulled back far enough to no longer be a concern, at least in the short-term. For “best of breed” top … Continue reading Relief, in the form of credit spreads

Say, do you think risk is still ‘on’?

Message from Junk Bonds is still risk ‘on’ People touting bearish media headlines (like the Omicron/Fed tapering 1-2 punch) may be reinforcing the herd’s tendency to react rather than think, but all you have to do to know what the market actually thinks is to watch the indicators. Those would include the Copper/Gold ratio for its inflationary cyclical/counter-cyclical indications. It would include Silver/Gold, for its … Continue reading Say, do you think risk is still ‘on’?

The Fed is not directing the markets, but indicators like this are…

The Fed, like the rest of us, is being directed by markets As shown in yesterday’s post the Fed is being directed in large part by the 2yr Treasury yield, which is rising to inform them they are lagging with respect to inflation fighting (ha ha ha, but work with me here). Other market indicators like credit spreads will actually tell the story of when … Continue reading The Fed is not directing the markets, but indicators like this are…

Stock market correction: Thus far, normal

The September-October stock market correction is thus far normal It’s normal that… After a summer of excessive risk taking and speculation the stock market would take a correction in September as da boyz and da machines get back to work full time. The supposedly spooky Sept-Oct seasonal will live up to its reputation to the degree that it clears out the momos and other summer … Continue reading Stock market correction: Thus far, normal


Speculation is Intact by Junk Bond Indicators

Nominal Junk Bonds (HYG) show risk (and speculation) ‘on’… With a thus far small easing of the speculative froth lately, Junk Bond indicators continue to not yet show cracks in the speculative market’s veneer. Nominal Junk is moving sideways above the SMA 50 and Junk/Treasury and Junk/IG are as yet merely pulling back from over enthusiastic readings. Doesn’t mean a correction cannot start but it … Continue reading Speculation is Intact by Junk Bond Indicators

Junk and Junk’s Ratios to ‘Quality’ Bonds

Junk bonds have not yet cracked as speculation continues The stock market is probably not going to crack until the ultimate sign of rampant speculation cracks. That would be Junk bonds and especially their ratios to supposed quality bonds like Treasury and Investment Grade. Here is nominal Junk (HYG). The uptrend is intact. Note that on these charts dividends are not rolled in. If they … Continue reading Junk and Junk’s Ratios to ‘Quality’ Bonds

Canaries at Odds

This article calls junk bonds a canary in a coal mine. Analysts often view ructions in the high-yield, or “junk-bond,” market as a canary in the coal mine, or an early warning to when investors might start taking flight from riskier assets altogether. I obviously see bearish junk as a bearish confirmation for the markets, but it’s not a canary. Canaries are/were put in coal … Continue reading Canaries at Odds


Junk Bonds May Finally Be Cracking

Any bearish phase in the broad market would be suspect without junk bonds also going bearish. The top panel is nominal HYG (Junk). The middle is HYG/TLT (Junk/Treasury) and the bottom is HYG/LQD (Junk/Investment Grade). The two lower panels have been negatively diverging the post-March relief rally all along and we’ve been noting recently in NFTRH that nominal Junk has been rolling after failing to … Continue reading Junk Bonds May Finally Be Cracking


Speculative Inflation bounce now suspect

Just as the larger Q4 2019 inflation trade failed miserably, this one is starting to pop its seams and come apart. At least according to these inflation and speculation gauges. TIP/IEF is still relatively elevated but TIP/TLT, which is the ratio I had previously overlaid w/ SPX (turned out to be a good warning of the Q4 reflation failure) is not pleasant at all for … Continue reading Speculative Inflation bounce now suspect

Junk finally cracks

Dividend unadjusted HYG broke down a few days ago and for months now we’ve been noting the breakdowns vs. Treasury and Investment Grade. But today divy adjusted HYG has slipped below the SMA 50. So at the moment at least, the stock market may be losing one of its risk ‘on’ guides. Subscribe to NFTRH Premium (monthly at USD $33.50 or a 14% discounted yearly … Continue reading Junk finally cracks

Who’s Leading You Astray?

From NFTRH 537’s Market Internals segment… “Who’s leading you astray, nominal Junk or its hidden bearish indicators?” Junk has since made a new high. Whee, party on Garth! Junk/Investment Grade is not buying it, however. Nor is Junk/LT Treasury. Notice how Junk bonds vs. higher quality bonds were in line with nominal Junk at the September highs. Now? Not so much. Garth is advised to … Continue reading Who’s Leading You Astray?

Negative Signals From Junk Bonds Continue

A holiday week is always a little dicey, but NFTRH’s Market Internals segment has been turning more indicators from green to neutral to red over the last several weeks. Here’s one of the red ones. This garbage persisted in keeping the casino going all through Bernanke’s inflated bull market. This is just a daily chart so it’s signaling need not be terminal. But it’s not … Continue reading Negative Signals From Junk Bonds Continue