17 replies to this topic

[dcengr]

I'm looking at PHK, DJUtils, and TLT.. They're all puking. Umm something is wrong here. Is there a liquidity problem? Credit Derivatives comes to mind if junk starts to tank.. those things could cause one helluva financial crisis. But WHY are they tanking.. and why now? Is China dumping our bonds? Related to dollar strength? Gold is bouncing.. something's afoot.

[fib_1618]

Is there a liquidity problem?

As of last weekend, there's no apparent liquidity problems at all.

Probably just a simple matter of "expansionary" rotation with much of the data at or near all time highs, but we'll see how the interest rate sensitive A/D numbers look later on.

Fib

[dcengr]

Is there a liquidity problem?

As of last weekend, there's no apparent liquidity problems at all.

Probably just a simple matter of "expansionary" rotation with much of the data at or near all time highs, but we'll see how the interest rate sensitive A/D numbers look later on.

Fib

I say this because TLT normally has a bounce when RSI5 signal goes down this low.. its not bouncing. So there's significant weakness here.

The DJU broke its weekly trendline also..

[fib_1618]

I say this because TLT normally has a bounce when RSI5 signal goes down this low.. its not bouncing. So there's significant weakness here.

The DJU broke its weekly trendline also..

Noted...it "feels" bad, doesn't it?

Fib

[dcengr]

I say this because TLT normally has a bounce when RSI5 signal goes down this low.. its not bouncing. So there's significant weakness here.

The DJU broke its weekly trendline also..

Noted...it "feels" bad, doesn't it?

Fib

Feels like something's afoot. Part of regular chop chop? I dunno. Lots of trendlines breaking.

I have no position in utils, bonds, though.

[no_mind]

It would seem that maybe the Treasury rally since May or so to Dec. is finished doing its share of rescuing the housing market & economy (at least for the time being), note chart below of 30yr fixed rates. Lower commodity prices also helped. Retail sales figures are coming in looking nice for Dec. and look to hold up thru Spring so a lot of things are looking up at the moment and the stimulus is being removed. To me it seems to be a natural adjustment with no dark meanies lurking in the shadows, but who knows, we'll see.

Best,

Tom

Edited by no_mind, 12 January 2007 - 06:02 PM.

[Gary Smith]

Meanwhile in the real world of junk bondland historic highs today in such issues as PRHYX. And credit spreads have narrowed in 2007!!!! If you watch the closed end junk funds such as PHK, which trade at a premium to NAV, you won't understand what is happening in the real world. For instance, PHK had a 4% to 5% haircut a few months ago while all the while junk was making historic highs on a daily basis. Nonetheless, I agree junk is a ticking timebomb. But I'm not about to begin looking at everything and anything from a bearish perspective until price dictates.

[fib_1618]

Feels like somethings afoot. Part of regular chop chop? I dunno. Lots of trendlines breaking.

Like what the equity market did last May?

Fib

[dcengr]

Feels like somethings afoot. Part of regular chop chop? I dunno. Lots of trendlines breaking.

Like what the equity market did last May?

Fib

Too early to tell. I'm not seeing big red candles yet. So far bunch of smaller ones getting bigger as they go down.

TLT has an ominous pattern to it... if it goes down tuesday, my guess is it will be a big red candle.

[arbman]

Beside the higher rates, it looks like there is less and less demand for the Treasury paper. The deficit has grown slower in 2005 and 2006. The strength of the dollar also confirms this. Perhaps the economy is not as weak as many think and the money is rightfully going into the stocks...

Yet, here is another sign that the best times might be over...

- kisa