• Wed. Oct 9th, 2024

Mish’s Daily: The New Year Could Be All About Junk Bonds | Mish’s Market Minute

Mish's Daily: The New Year Could Be All About Junk Bonds | Mish's Market Minute

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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

Mish Schneider

About the author:
Mish Schneider serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision.

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Image and article originally from stockcharts.com. Read the original article here.