Junk Bonds-Bullish wicks, Bouncing Off Support, With Momentum Oversold



Junk Bonds are often looked at as leading indicators for key moves in the stock market.

Popular junk bond ETF's JNK & HYG have declined over the past few months, taking them down to support levels and pulling momentum down with them.

The above charts are weekly views of these ETF's, reflecting that both of them created bullish wicks at support with momentum the most oversold since the 2011 lows.

At the same time Junk was hitting bouncing off support lines, our proprietary "Shoe Box indicator" was hitting 5-year support levels and started sending off bullish signals the first of last week, while stocks still remained soft. 

From a message perspective, this type of price action from the junk arena is usually a positive for the stock market.



S&P 500 and VIX produce bullish and bearish wicks, surprise anyone last week?



Does it surprise you how much these patterns and price action looks very much the same in the S&P 500 and NDX over the past few years?

Time will tell how key last week was, as both stock index's were at support, creating bullish wicks and both fear index's did the opposite, creating bearish wicks at falling resistance.

Premium Members shorted fear last Wednesday due to the patterns, with stops on this new position at fear resistance levels. 



“CDCC indicator” – watching it closely for macro clues!



I am keeping a very close eye on the CDCC indicator for macro signs about the economy right now.

When it comes to performance this year nothing is hotter than Coffee & Cattle, as they are up 83% and 43% respectively as of this morning. The 4-pack below looks at these hot performing assets and two other key assets as well.



When it comes to investing, global confidence or lack of is very important. This 4-pack above looks at Cattle, Dow, Coffee and Copper.

Cattle is facing resistance at the top of rising wedge pattern, the Dow is at the top of a Mega-Phone pattern and could be breaking support, Coffee might be forming a monthly bearish wick at its 61% Fib retracement level and Dr. Copper looks to be forming a bearish descending triangle that two-thirds of this time results in lower prices. 

With technology being what it is, none of us are lacking for information, if anything it is easy to be overwhelmed by it. This 4-pack simply looks at pattern messages from some key assets of our lives, that say a ton about confidence or lack of.

In my humble opinion, what the CDCC indicator does in the weeks ahead is very important for the macro picture!