I'll just post the daily chart of SPY (cash) versus HYG - the Corporate High Yield Bond fund, and pretty much let it speak for itself.
The recent data is one of the larger divergences we've seen in a while, and one can note how it 'generally' has been tracking the index. So maybe what we are getting now is a 'leading' indicator of the risk appetite of the smartest money - and we'll see this week whether the huge divergence gets repaired (and HYG rises), or whether it is acting as a valid warning for SPY to begin at least a retrace sometime this week to react to account for the potential mood change among the whales.
Market technical oscillators (such as MACD, slow stochastic, etc.) tend to be a bit lagging. This is a search to find a slightly better true 'leading' signal; meaning that - to be useful - its turn should come slightly before that of the equity market without being too premature.
Have an excellent rest of the weekend.
TraderJoe
In the last post I understood your reason for drawing the trend line the way you did, namely lack of a clear reversal signal. Nonetheless, another trend line can be drawn, with many more touches, that could indicate a break and back-test.
ReplyDeleteES/SPY (CFD) 1-hr: options are blue 'e' and (iv) to end a triangle and (v) at the high, or still in magenta 4 at the 50% Fib with no overlap. There 'may be' a diagonal off of the top in green. But it could be the inverse of w-x-y-x-z, too. Kind of a no-one's land.
ReplyDeletehttps://www.tradingview.com/x/0OEDzmKq/
Prudent judgement, small positions & caution warranted.
TJ.
The bond yields are making a move. What's the official line in the sand for the triangle breakout? Approx yield on the 10 year bond of 4.60%?
ReplyDeleteThx
-TJ
In the link below, you can see where D is at 4.81%.
Deletehttps://www.tradingview.com/x/S8wXVPHP/
Odds of a breakout greatly improve over that wave. What you do with it is totally up to you. 'Trading in triangles is treacherous'. They don't always break to the upside although they certainly can. Again, the warning would be if some kind of intervention occurs. It's all probabilities. Weigh them as you see fit.
TJ
ES/SPY (CFD) 5-min: there is now a new low below the overnight low (ONL).
ReplyDeletehttps://www.tradingview.com/x/3HwDMfYJ/
And that takes the potential magenta wave 4 below 50% which drops the odds of it.
TJ
ES/SPY (CFD) 1-hr: here's the right-hand-side of the chart, with the alternates. The expanding diagonal did prove to be leading, but it could only be a,b,c down to 4. Otherwise, a i, ii (in red) is 'possible' but did not overlap as yet.
ReplyDeletehttps://www.tradingview.com/x/KuEu3Ljo/
TJ
If the blue 'b' wave wave-counting-stop is exceeded higher, then maybe look for a larger triangle fourth wave into Tuesday, or a direct fifth wave higher. There's currently a long way to go for that consideration, though.
DeleteTJ
A new post is started for the next day.
ReplyDeleteTJ