Now that we are one day into the new year, there are 2 pieces of advice we can give you.
The first is to learn a strategy–and then become a specialist in that strategy. For example, why not pick phases? We love them. Mish wrote a book on them. And, once you understand the phases on a daily and weekly timeframe, your trading will vastly improve.
Secondly, learn to follow bonds. Sure, short-term bonds work well as do the 20+ year long bonds. However, we are all about the high yield high debt junk bonds. We basically use the bonds to determine risk on/off. And we find that quieting the noise, especially with the dreary forecasts for this year, helps us trade a lot better.
The chart of HYG (or JNK, if one prefers) has been an excellent guide to the short and long-term market moves. It also keeps us out of harm’s way during the chop.
In June 2022, HYG bottomed. So did the market. Then, HYG had a phase change in July but could not quite get going enough to clear the 200-DMA. And so, the market sputtered. Then, the sharp reversal candle in October gave traders a good bottom risk point. The ensuing rally took the price right up to the December high and the 200-DMA.
Currently, HYG sits right under the 50-DMA. It also closed green on a red day in the indices. That tells us that risk appetite remains regardless. HYG outperforms the SPY, and the momentum had a bullish cross while the momentum trades above the moving averages. And, most importantly, as experts in phases, it tells us to watch that 50-DMA carefully.
For more detailed trading information, contact Rob Quinn, our Chief Strategy Consultant, to learn more about Mish’s Premium trading service or our other trading services during a brief consultation.
“I grew my money tree and so can you!” – Mish Schneider
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- S&P 500 (SPY): 375 support and 384 resistance.
- Russell 2000 (IWM): 170 pivotal support and 175 resistance.
- Dow (DIA): 325 support and 334 resistance.
- Nasdaq (QQQ): 260 support and 267 resistance.
- Regional banks (KRE)): 56 support and 61 resistance.
- Semiconductors (SMH): 196 support and 205 resistance.
- Transportation (IYT): 210 pivotal support and 215 now resistance.
- Biotechnology (IBB): 127 is pivotal support and 133 overhead resistance.
- Retail (XRT): 57 pivotal support and 63 now resistance. Holding 60.
Mish Schneider
MarketGauge.com
Director of Trading Research and Education
Wade Dawson
MarketGauge.com
Portfolio Manager
