HYG (High Yield Corporate Bonds) set to outperform TLT
Updated
US Corporate Bonds (8-10Yrs) Vs US Treasury Bonds (20Yrs)
Rising Ratio = Corporates Outperforming Treasuries
BLUE BARS = THE S&P500 STOCK MARKET INDEX
When Corporates underperform Treasuries and the ratio declines on this chart (black bars), USUALLY the stock market has gone down at the same time (NOTE THE BLUE BARS at the same time as the RED HIGHLIGHTED AREAS on the ratio chart). Treasuries in the last year have rocketed higher and is very likely from Central Banks both here in the US and around the world buying up US Treasuries (and the US Dollar).
HYG looks poised to outperform TLT to the tune of 10%-30% over the next year.
(Note: the MACD is a measure of the 12 and 26 week moving average. When the 12-week average is above the 26-week average, the "trend" can be considered "UP" and vice-versa. You can see the long trend down in the MACD that has now turned back UP, possibly signifying a change in "trend" from down to up.)
Tim
April 2, 2015 11:23AM EST 68.97 Ratio of (HYG*100/TLT). HYG is 90.48 +0.09, TLT is 131.21 -0.92 today
Rising Ratio = Corporates Outperforming Treasuries
BLUE BARS = THE S&P500 STOCK MARKET INDEX
When Corporates underperform Treasuries and the ratio declines on this chart (black bars), USUALLY the stock market has gone down at the same time (NOTE THE BLUE BARS at the same time as the RED HIGHLIGHTED AREAS on the ratio chart). Treasuries in the last year have rocketed higher and is very likely from Central Banks both here in the US and around the world buying up US Treasuries (and the US Dollar).
HYG looks poised to outperform TLT to the tune of 10%-30% over the next year.
(Note: the MACD is a measure of the 12 and 26 week moving average. When the 12-week average is above the 26-week average, the "trend" can be considered "UP" and vice-versa. You can see the long trend down in the MACD that has now turned back UP, possibly signifying a change in "trend" from down to up.)
Tim
April 2, 2015 11:23AM EST 68.97 Ratio of (HYG*100/TLT). HYG is 90.48 +0.09, TLT is 131.21 -0.92 today
Trade closed: target reached
HYG/TLT rallied from 69.23 to 77.23 for more than a 10% move in short order and has since come unglued and has melted down to new lows.
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