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Indicators of threat aversion are rising within the monetary markets. Danger aversion first appeared within the junk bond market in October and this week we’re seeing cash transfer into Treasury bonds, the final word safe-haven property.
Junk bonds have the best threat as a result of they’re the lowest-rated company bonds. As such, weak spot in junk bonds factors to threat aversion within the company bond market. The primary chart reveals the Junk Bond ETF (JNK) hitting resistance within the 110 space in July and September, after which breaking down in October. The ETF consolidated close to the assist break after which continued sharply decrease in November. The indicator window reveals StochClose (125,5), a pattern following indicator, turning bearish in early October.
Treasury bonds are the precise reverse of junk bonds as a result of they’re deemed the most secure bonds within the US bond market. In distinction to junk bonds, Treasury bonds can profit when financial prospects dim and/or threat aversion creeps into the monetary markets. The subsequent chart reveals the 20+ Yr Treasury Bond ETF (TLT) advancing from March to July, consolidating and breaking out this week. Additionally discover that StochClose turned bullish in early July. Word that StochClose is a part of the TIP Indicator Edge Plugin for StockCharts ACP.
The subjects for the TrendInvestorPro weekend video are proven beneath. This in-depth video begins with the broad market setting, bonds, gold and the Greenback. We then take a top-down method with our ETF universe by that includes the strongest first and the weakest final. These ETFs are grouped by developments, patterns and setups. Click here to subscribe and get immediate access.
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Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic method of figuring out pattern, discovering indicators throughout the pattern, and setting key worth ranges has made him an esteemed market technician. Arthur has written articles for quite a few monetary publications together with Barrons and Shares & Commodities Journal. Along with his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Enterprise College at Metropolis College in London.
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