5 replies to this topic

[arbman]

There is a downward cascade setting up, ETF is also selling today! This is quite odd...

http://stockcharts.com/c-sc/sc?s=phk&p=D&yr=0&mn=6&dy=0&i=p13527836019&r=5648&.png

Notice this chart did not even bother to participate to the equity sell off recently, so it is definitely leading and the RSI divergence is kind of gross, also compare the cascade to the May top...

Perhaps we may get some volatility soon after this extreme o/b setup in the equities, I would give a day or two to the equity market participants to turn a bit more speculatively bullish though before a swing attempt...

Edited by arbman, 13 July 2010 - 11:54 AM.

[selecto]

I think the bond is going to have to start doing a tad better before much growling can be done.

[arbman]

I think the bond is going to have to start doing a tad better before much growling can be done.

As Fed prints, the bond traders expect better returns against the inflation, of course eventually the equity market will not support those kind of valuations. Extracting too much interest from the earnings will not justify further upside, then comes the cascade down... For now, let them fool themselves that they can print their way to the prosperity...

[andiron]

fed will print but market will have to tank to 800 level before fed panics

[arbman]

These other HY Bond ETFs are not looking like overpriced PHK...

http://stockcharts.com/c-sc/sc?s=jnk&p=D&yr=0&mn=6&dy=0&i=p13527836019&r=5648&.png

http://stockcharts.c...019&r=5648&.png

All in all there are just too many positives after this rally to get much bearish anymore, but the market is o/b so some volatility should be expected in the days ahead... Let's see.

[arbman]

To give some more perspectives, these are also looking a bit dangerous at this juncture...

http://stockcharts.com/c-sc/sc?s=agg&p=D&yr=0&mn=6&dy=0&i=p13527836019&r=5648&.png

http://stockcharts.c...019&r=5648&.png

But a sell off in bonds has to happen to price the inflation better... But I am not sure this supports higher valuations in the equities unless the economy is reaccelerating beyond the winter.

There is a soft spot coming in the Q3-Q4 and the market tried to already price it so far...