This kind of diversion between equities and bonds usually does not end well for equities. The above chart plots S&P500 index vs Vanguard Total Bond Market ETF (NYSEARCA:BND). The divergence starts from Nov 2016 and appears to be peaking out.
Category Archives: Stock Market News
High Yield Bond Market Pressure in 2016
High yield bonds (funded by multiple rounds of QE) will definitely put pressure on the global financial system this year. I believe over $1 trillion of QE went into energy related bonds (in US and Europe), and nobody had thought of $30 oil plus strong US Dollar. Euro and Rupee/INR will be at risk from a stubbornly strong US Dollar. Zero debt companies with substantial earnings in USD like Google, Infosys, McDonalds maybe the safest places in market in 2016. Stay long on USD. Energy and Materials stocks should be handled only by advanced traders. There maybe many sharp corrections and short-covering rallies.
S&P500 Technical Analysis – 25Nov2015
S&P500 Technical Analysis
Date:11/25/2015 O=2084.00 H=2092.50 L=2082.25 C=2088.00 V=743,484
RSI Indicator:
Conventional Interpretation: RSI is in neutral territory. (RSI is at 59.39). This indicator issues buy signals when the RSI line dips below the bottom line into the oversold zone; a sell signal is generated when the RSI rises above the top line into the overbought zone.
Additional Analysis: RSI is somewhat overbought (RSI is at 59.39). However, this by itself isn’t a strong enough indication to signal a trade. Look for additional evidence before getting too bearish here.
Continue reading S&P500 Technical Analysis – 25Nov2015