Three weeks ago it looked like a “panic in the high yield” complex might have taken place, per the largest outflows in history being reported… at the same time these high yield funds were testing their 200-EMA lines. (see post here). Panic at support???
Below is an update to the high yield 6-pack-
CLICK ON CHART TO ENLARGE
At the prior posting I shared that with the high yield funds setting on the 200-EMA lines, it would be a good place to buy the funds and use the 200-EMA line as a stop loss. Now each of the high yield “funds” are not only back above their 200-EMA lines the majority of the funds are now back above the 50-EMA lines, which reflects positive price action.
Last summer high yield funds touched/broke the 200-EMA by a small percentage and then turned higher, soon breaking back above their 50-EMA…. looking very much like they are today. Last year the upside movement in the high yields sent a good message to the broad market.
Game Plan….remain an owner of the high yield “funds” with the 200-EMA as the stop loss on the purchase of a few weeks ago.
Thanks Jim….have been using these tools and using MA lines since 1998, per the high yield funds. This isn’t a new idea and has worked very well without troubles or challenges.
It is highly unlikely that high yield mutual funds will allow you to trade around the 200-day moving average. They abhor in-and-out trading. They are more likely to ban you from ever buying the fund again in the future.
Van…Great question. I do respect the action of the transports a ton…pretty weak today and up against important resistance. High yields bottomed and turned higher in July of last year, all the while tranports, broad market and russell remained weak for a couple of more “months.”
As I shared this morning…Dollar and Copper have in the past been pretty good leading indicators and so far they are acting ok.
Thanks for your viewership and kind words,
Chris
Chris,
What do you think of the current underperformance of the transports and russell 2k in light of the hy strength and possible ndx breakout? Thanks for your great site.