GoNoGo Charts sees investors embracing risk
Often used as a proxy for risk, the trend in the ratio between junk bonds and treasuries can be very informative.
The GoNoGo Trend indicator shows that during the month of May, the ratio was able to battle out of the “NoGo” trend that it had been in since the end of January. This ratio tends to lead stocks as it did when it signaled investors to be “Risk off” at the end of January.
Interestingly, stocks rallied so quickly out of the lows in March that the JNK/TLT ratio flagged “Go” later than stocks.
This tells us that investors were slow to accept that the rally was as strong as it has been.
Long term, looking at a weekly chart, the GoNoGo charts show risk is still “Off”, with the GoNoGo Oscillator riding the resistance line from below.
The GoNoGo Trend indicator shows that during the month of May, the ratio was able to battle out of the “NoGo” trend that it had been in since the end of January. This ratio tends to lead stocks as it did when it signaled investors to be “Risk off” at the end of January.
Interestingly, stocks rallied so quickly out of the lows in March that the JNK/TLT ratio flagged “Go” later than stocks.
This tells us that investors were slow to accept that the rally was as strong as it has been.
Long term, looking at a weekly chart, the GoNoGo charts show risk is still “Off”, with the GoNoGo Oscillator riding the resistance line from below.
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