Creditcane™: Is the market finally starting to wake up to the realization that there will not be any Fed stimulus?
Bearish short day. Midpoint below EMA(10). Tested and failed SMA(55) but held SMA(21). Tested and failed the 61.8% minor retrace (1343.55). New low on daily 3LB (reversal is 1365.51). QE2infinity.
Bullish short day. Midpoint above EMA(10). Tested and held the 0.0% retrace (83.11). Still above all SMA's. New high on daily 3LB (reversal is 82.62).
Bullish long day. Midpoint below EMA(10). Tested and failed SMA(89). Tested and failed its 61.8% minor retrace (18.81). New high on daily 3LB (reversal is 16.80).
Spinning top day. Midpoint below EMA(10). Tested and failed its 61.8% retrace (1600.40). Tested and failed SMA(21). No daily 3LB changes (reversal is 1634.20). Must have the precious.
Bearish short day (didn't confirm bullish harami). Midpoint below EMA(10). Still failing all SMA's. Still failing its 0.0% minor retrace (1.2373). New low on daily 3LB (reversal is 1.2468).
Bearish engulfing day. Midpoint above EMA(10). Still above all SMA's. Holding above its 61.8% retrace (38.86). No daily 3LB changes (reversal is 39.08).
Bearish short day. Still failing all SMA's. Midpoint below EMA(10). Holding above its 0.0% retrace (14.71). No daily 3LB changes (reversal is 17.65).
Bearish long day. Holding above SMA(21). Midpoint above EMA(10). Now failing its 38.2% minor retrace (86.56). No dally 3LB changes (reversal is 77.69).
Bearish short day. Still failing all SMA's. Midpoint below EMA(10). Holding above its 100.0% retrace (26.66). No daily 3LB changes (reversal is 26.29).
Bearish short day. Midpoint below EMA(10). Tested and failed SMA(21,55). Still failing its 61.8% retrace (46.14). New low on daily 3LB (reversal is 46.08).
Bearish long day. Tested and failed SMA(21,55). Midpoint below EMA(10). Tested and failed its 38.2% minor retrace (0.7678). Daily 3LB reversal down (reversal is 0.7754).
Bearish short day. Midpoint below EMA(10). Tested and held SMA(21). Tested and failed its 61.8% minor retrace (3.430). No daily 3LB changes (reversal is 3.305).
Bearish short day. Still above all SMA's. Midpoint above EMA(10). Holding above its 38.2% minor retrace (592.47). No daily 3LB changes (reversal is 592.52).
Bullish short day. Midpoint above EMA(10). Still above all SMA's. Still failing its 0.0% retrace (129.08). No daily 3LB changes (reversal is 124.20).
One of these is heading in the wrong direction.
IT HAS BEGUN. YOU HAVE BEEN WARNED.
8 comments:
Quite a few deals in fixed income space today.
Corporate bonds are priced expensively, in my opinion. Sure, Bernanke is forcing a bunch of fixed income investors out on the risk spectrum, but the smart money isn't going to play the Fed's game. In my opinion, the absolute yields on corporate bonds have increasing relevence at the zero bound (i.e., a spread of x over benchmark tsy looks much better in a normal interest rate environment than this one, where we are converging on zero; here, I'd rather just own the treasury).
Comcast removed CNBC-W from the channels in my area. It's the only time I will watch CNBC. They are not the cheerleaders CNBC is. Bloomberg doesn't do it's Asian coverage until late.
Matthew
Why is IQI still near it's highs while MUB is struggling to hold its SMA(21)? I'm using weekly charts. Are traders jumping into junk corporates?
AmenRa:
I used to watch CNBC-W a LOT in 2006 and 2007. I also had a lot of respect for that channel, as it seems the analysts from Australia, Singapore, and Hong Kong had a much more realistic take on the global economy (and, by the way, a lot of them nailed the severe global recession in 2006).
I'm not familiar with those ETFs or their particular technicals; nor am I familiar with the muni bond market. I usually leave our muni trader alone. The muni market is a lot less liquid and transparent than I care for and the finances and security structures can be a lot more complex.
The junk bond market has been pretty active lately on the new issue front and (even though we don't touch any junk bonds) anecdotally, dealers say these things are flying off the shelves. And you can kind of see it in the prices--junk bonds are catching a bid.
I've been watching Brazil for the past couple of months. I don't have a read (so don't ask), but it has been amusing to watch the vertiginous decline. I feel like I heard someone say on bubblevision yesterday that U.S. equities are due for a reality check (due to softening economic prospects) and that EM equities are a much better bargain. Does that pass the smell test? No, it doesn't. If U.S. equities are pressured down, who seriously thinks EM equities will fair any better. You must have to pass an idiot test to get on CNBC.
http://www.hussmanfunds.com/wmc/wmc120709.htm
quote:
The way out is to restructure bad debt instead of rescuing it. Particularly in Europe, this will require numerous financial institutions to go into receivership, where stock will be wiped out, unsecured bonds will experience losses, senior bondholders will get a haircut on the value of their obligations, and loan balances will be written down. Bank depositors, meanwhile, will not lose a dime, except in countries where the sovereign is also at risk of default. Even there, depositors will probably not lose any more than they would if they held sovereign debt directly. In the U.S., the pressing need continues to be mortgage restructuring, and an emerging recession is likely to bring that issue back to the forefront, as roughly one-third of U.S. mortgages exceed the value of the home itself.
Liquidity does not produce solvency. Bailouts from one insolvent entity to another insolvent entity do not produce solvency. Efforts to stimulate growth will not produce solvency if a large fraction of the economy is overburdened with debt obligations that cannot be repaid. What will produce solvency is debt restructuring. The best hope is that global leaders will recognize the necessity and move ahead with debt restructuring in an orderly way, particularly in the European banking system. The worst nightmare is that global leaders will deny the necessity and belatedly discover that they have squandered the last opportunity to avoid a disorderly finale."
AmenRa,
as per, nice Chartage/Wrappage/(O-)'pinionage..
seriously, mucho appreciado!~
and, re: 01:44 (Hussman)..
of course, he's correct.
"Too many financial Claims, Too little (decent) Collateral (behind them).."
it's what happens, when, as "Dire Straits" put it: ~"Money for Nothing, and Chicks for Free.." -- it All gets Abused.
AAIP
10yr yield plummeted to 1.459% at the close of the auction. It was at 1.497% just before the sudden move. Not enough people buying?
New thread.
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