Posts tagged as Bonds


Earnings Slump And Junk Spreads Blow Out

2019-10-09 | Jason Goepfert


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Earnings slumpStandard & Poor’s is estimating that operating earnings among the 505 companies in the S&P 500 index will decline from where they were a year ...

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What I'm looking at - S&P and MSCI trailing earnings, high yield spreads, Sweden PMI, Dow Transports

2019-10-08 | Troy Bombardia


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Monday Color - Breadth whipsaws, small traders, surprise spread, bond sentiment

2019-10-07 | Jason Goepfert


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Monday Color - Small traders, dollar sellers, S&P momentum, quarterly run, energy bonds

2019-09-30 | Jason Goepfert


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Stocks and the dollar are "joined at the pip"

2019-09-26 | Jason Goepfert


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Joined at the pipThere usually isn’t much of a correlation between movement in stocks and the dollar. As much as investors want to assign a narrative linking ...

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Thursday Color - Gold flow and open interest, bond flow, VIX call buying, Hang Seng rollover

2019-09-26 | Jason Goepfert


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What I'm looking at - South Korea PPI, TLT Optix, McClellan Oscillator, Utilities Optix

2019-09-25 | Troy Bombardia


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Tuesday Color - Big Managers Get Bullish, Gold/Dollar Correlation Spike, Repo Rate, Volatility Premium

2019-09-17 | Jason Goepfert


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Bond Bulls Curb Their Enthusiasm

2019-09-16 | Jason Goepfert


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Break in bond bullsFor the first time in more than 9 months, optimism on bonds has come down to neutral territory. That ends one of the longest streaks in ...

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Why So Defensive?

2019-09-06 | Jason Goepfert


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.High on defensivesThe most defensive sectors of the market, consumer staples and utilities, saw a jump in the number of stocks rising to 52-week highs.This ... [...]

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What I'm looking at - Recession Probability Model, emerging markets, Treasury yields, breadth, Consumer Confidence

2019-09-04 | Troy Bombardia


The S&P has rallied back to the top of this month-long range. Here's what I'm looking at.NY Fed Recession Probability ModelWith the yield curve pushing deeper into inversion territory, the "probability of a recession" from various popular recession models based on yield curves continues to ... [...]

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10-year yield consistently below 50-day average

2019-09-04 | Jason Goepfert


When the 10 year Treasury yield was in a persistent downtrend in the past, it usually rallied over the next 3 months. However, this didn't stop the 10 year yield from falling more in the short term (next few weeks).See this premium note for more. [...]

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What I'm looking at - ISM PMI, 60/40 portfolio, XLU, gold:silver ratio

2019-09-04 | Troy Bombardia


The S&P 500 remains stuck in the 2930-2940 range. Here's what I'm looking at.ISM manufacturing PMIAs Jason noted yesterday, the widely followed ISM manufacturing PMI has fallen below 50. This means that it will be a bearish factor for the Macro Index starting on October 1. Both the WSJ and ... [...]

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1 Of The Whippiest, Most Uncertain Months In A Decade

2019-08-27 | Jason Goepfert


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.A whippy monthOn an average day over the past month the S&P 500 has moved 1%, one of its widest ranges since the financial crisis.When coming soon after a new ... [...]

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What I'm looking at: National Activity Index, SPY breadth, short term breakout, bond yields, Ifo

2019-08-27 | Troy Bombardia


The stock market remains volatile within a narrow range. Here's what I'm looking at.Chicago Fed National Activity IndexThe Chicago Fed publishes a National Activity Index that gauges whether the national economy is growing above or below its average historical rate. Readings > 0 indicate ... [...]

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Timing A Move Out Of Stocks, As They Whip Around And Bond Spreads Blow Out

2019-08-23 | Jason Goepfert


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Bond blowoutThe riskiest segment of the corporate bond market has been suffering, while safer bonds have been less of a focus for sellers.That raises the ... [...]

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What I'm looking at - State Coincident Index, Conference Board, McClellan Summation, TLT Optix, Treasury yields

2019-08-23 | Troy Bombardia


The stock market is flat ahead of Jackson Hole. Here's what I'm looking at:Philly Fed State Coincident IndexThe Philadelphia Federal Reserve creates a coincident index for each state that looks at whether a state's economy is improving or deteriorating. The Philly Fed then combines this into a ... [...]

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What I'm looking at - Put/Call spike, Rydex flows, Rydex breadth, Economic Surprise & bonds

2019-08-22 | Troy Bombardia


The stock market continues to bounce within a range. Here's what I'm looking at.Put/Call spikeWhile the stock market rallied more than 0.8% yesterday, the Total Put/Call ratio spiked to the highest level since this pullback/correction began. This is extremely rare because the stock market and ... [...]

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What I'm looking at - small caps vs. large caps, corporate earnings, bonds, daily swings, RV's

2019-08-21 | Troy Bombardia


The stock market continues to swing back and forth. Here's what I'm looking at:Small vs. large capsSmall cap stocks were relatively weak during the Q4 2018 stock market selloff, and have been relatively weak since February. While the S&P 500 has been trending sideways/higher, the Russell 2000 ... [...]

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Stocks Have Gone Absolutely Nowhere

2019-08-20 | Jason Goepfert


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Going nowhereThe most benchmarked index in the world has gone nowhere for over a year and a half. The S&P 500 was just trading at the same level it was at in ... [...]

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Tuesday Color - Overseas Rebound, Sector Recoveries, HY vs IG Spreads, VIX Drop

2019-08-20 | Jason Goepfert


Here's what's piquing my interest as stocks gyrate in what is likely going to be a pattern of low (and lower) volume in the days ahead.Overseas ReboundIn the Hang Seng index of Hong Kong stocks, 90% of them have jumped enough to trade above the 10-day averages. That has preceded some short-term ... [...]

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Panic-Level Selling Last Week As Bonds Hit Historic Extreme

2019-08-19 | Jason Goepfert


Safe haven heavenFriday provided some relief, but the past few weeks have been rocky for stocks. In response, investors moved aggressively into havens like bonds and gold. The 3-week change in the total return on bonds and gold are so far above that for stocks that it’s neared a 30-year ... [...]

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Market overview: combining technicals & fundamentals

2019-08-17 | Troy Bombardia


I usually write an overview of the markets each week that combines the technical & fundamental indicators I look at:Technicals (1-2 months): no clear edge in either direction. If I had to guess, I think there’s a 60% chance that the S&P makes new lows. Not decisive.Technicals (3-6 months): ... [...]

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Friday Color - Risk Off, Options Anxiety, Many Lows, Big MOVE, Sector Extremes

2019-08-16 | Jason Goepfert


Here's what's piquing my interest as bulls try to enjoy a summer Friday.AnxiousSigns of nervousness are everywhere. Over the past couple of days, we've seen a spike in pessimistic extremes, so there's no shortage of examples. Troy pointed out several aggregate sentiment gauges (Dumb Money, CNN ... [...]

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Wednesday Color - Curve, Fund Managers, Gold & Yen, 1% Moves, Skew

2019-08-14 | Jason Goepfert


Here's what's piquing my interest as we go through yet another volatile session.CurvyMight as well get to it, since it's going to be a popular topic today. Another part of the Treasury yield curve inverted (or threatening to do so depending on the data source). The one that matters the most ... [...]

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Tuesday Color - Gamma, Dislocations, Merval & Hang Seng, Emerging Fund Outflow, Bond Optix

2019-08-13 | Jason Goepfert


Here's what's piquing my interest as we get some relief from the daily threat of trade dispute escalations. We'll have to see if this holds into the close and triggers another big up thrust day from the recent low.New IndicatorsYou can now view the HiLo Logic Index for both the NYSE and ... [...]

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Friday Color - Lows Recede, Summation Rollover, Bad Ag, Bond Bulls (Again)

2019-08-09 | Jason Goepfert


Here's what's piquing my interest as traders deal with another tremor on trade tweets.RecoveringWhen monitoring for extremes, there are typically three strategies for implementation:1. When it first registers an extreme2. When it registers an extreme, then price triggers a technical entry3. When ... [...]

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The Stock-Bond Relationship Is Out Of Whack

2019-08-08 | Jason Goepfert


Strained relationshipThe drop in stocks over the past week didn’t happen in isolation, as traders fled to the perceived safety of the bond market. That moved the Stock/Bond Ratio to an extreme level, even while the S&P remains in a generally positive environment.This has typically resolved in ... [...]

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Wednesday Color - ETF Asset Drop, P/C Ratio, Fidelity Sectors, Warning Signs, Bond Bulls, Debt Contraction, Mexico

2019-07-24 | Jason Goepfert


Here's what's piquing my interest so far today.Leaking AssetsThe major indexes (excepting the Russell 2000) have risen toward fresh highs over the past week, but ETF traders don't seem to care. Assets in SPY, DIA, and QQQ have all declined over the past 5 sessions.Shares outstanding in all 3 ... [...]

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What Scary Thing Do Bond Traders Know?

2019-07-15 | Jason Goepfert


End to inversionThe spread between 3-month and 10-year Treasury yields has been inverted for more than a month, with the shorter-term bills yielding more than the longer-term notes.At 35 days, the current stretch of an inverted curve is the longest since 2007. When that spread turns positive, it ... [...]

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Friday Color - Yield Curve, Small Caps, XLU vs XLE, Bonds, Brazil

2019-07-12 | Jason Goepfert


Here's what's piquing my interest on what looks to be another small-range attempt at new highs.SteeperOne of my family's great jokes is that although I'm 6'7", I don't like heights. It's a never-ending source of entertainment for them - tall guy who's afraid of heights, haha. My knees get weak, ... [...]

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Wednesday Color - Quiet, Fed Talk, Pound, Copper, Bond Optimism

2019-07-10 | Jason Goepfert


Here's what's piquing my interest as traders react to the latest Fed talk.All QuietThe WSJ notes that stocks haven't been moving much lately, with the S&P 500 notching its 21st day without a 1% or larger move. This is encroaching on some of the longer streaks in its history, especially when the ... [...]

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Tuesday Color - High Yield Rally, Sector Breadth, Recession Risk, Yield Drop

2019-07-09 | Jason Goepfert


Here's what's piquing my interest on another day showing a recovery from early weakness.High Times For JunkOver the past couple of weeks, the high-yield (junk) bond market has enjoyed one of its best stretches in at least 14 years. Nearly 30% of the 2,000+ bonds tracked by the Nasdaq hit ... [...]

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Monday Color - Short-Term Optimism, Funds Vs Options, Lagging Small Caps And Surprises, Bulls Return, Bonds

2019-07-08 | Jason Goepfert


Here's what's piquing my interest as markets suffer their usual post-holiday slide.Short-Term ExtremesWhile stocks didn't surge last week, they did hold their gains. And whoever was still trading over a holiday week was pretty optimistic it was going to continue.The shortest-term indicators we ... [...]

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This Hasn't Happened To Bonds In 3 Years

2019-06-27 | Jason Goepfert


Brittle bondsThe Optimism Index for bonds hit an extreme low last October. The rally since then has caused it to cycle to the opposite extreme, with the 20-day average now the highest in almost 3 years.Just as it has been rare to see any sustained losses in Treasuries when the Optix gets as low ... [...]

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Tuesday Color - Less Confident, Relative Lows, Bond Optimism, Gold Surge

2019-06-25 | Jason Goepfert


Here's what's piquing my interest on a mostly weak day. Markets are likely going to be held to the latest posturings and headlines ahead of and during the upcoming G-20 meeting.Less ConfidentThe latest Consumer Confidence survey came in way below economists' expectations, which won't help the ... [...]

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The Everything Rally

2019-06-24 | Jason Goepfert


The everything rallyTotal return stock and bond indexes are hitting all-time highs at the same time. They cover an array of stocks and bonds, suggesting extreme breadth of buying interest, as noted by Bloomberg.When they’ve all hit records together, it has been an especially good longer-term ... [...]

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Wednesday Color - Everything Rallies, Bond Flow and Vol, Within 1%, Energy, France

2019-06-19 | Jason Goepfert


Here's what's piquing my interest on this waiting-for-the-Fed day.Everything RalliesTuesday provided some interesting cross-currents, allowing assets to rise that normally provide some balance to each other. It was a bad day to be short pretty much anything - stocks, bonds, the dollar, gold, ... [...]

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Monday Color - Tiny Range, Options Traders, A Split S&P, Empire Fail

2019-06-17 | Jason Goepfert


Here's what's piquing my interest on what's likely to be several waiting-for-the-Fed days.No CommitmentThe WSJ notes that stocks have been stuck for the past week. The S&P 500 hasn't had a daily up or down move of more than 0.5% for what would be the 6th straight day, if today's meandering ... [...]

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Friday Color - Bond Flow (!), Recession Risk, Breadth Thrust, Gold Options, Stock Screen

2019-06-14 | Jason Goepfert


Here's what's piquing my interest so far on a choppy Friday.Bond FlowOver the past 8 sessions, corporate bond ETFs LQD, HYG, and JNK have seen steady inflows. To a near-record degree, in fact. That happened in the midst of a nice run in January of this year, with no ill effect. But it also ... [...]

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What The Fed's First Cut Has Meant

2019-06-13 | Jason Goepfert


First cutThe probability that the Fed will cut rates is rising. It’s still only about a 20% chance in June but more than 80% in July. That will end the longest-ever streak with steady or rising rates. Following these “first cuts”, stocks have done either poorly, or really well, with no middle ... [...]

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Tuesday Color - Gaps Up, Bond Flow, Weird Volatility, Sector Highs

2019-06-11 | Jason Goepfert


Here's what's piquing my interest on another gap-up morning.Another GapNear the depths of pessimism a couple of weeks ago, we saw that traders were extremely anxious, pushing stock futures lower almost every morning. They've reversed the tide, now futures are gapping up every day.This will be ... [...]

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Friday Color - Jobs, Econ Surprises, 4 Gains, Breadth, Energy, Gold

2019-06-07 | Jason Goepfert


Like Tuesday, I won't be publishing a Daily Report, but will instead send this as a Bulletin. This is typically what's sent out around midday as a Premium Note - it's a look at my notebook of things I'm watching throughout the day, some of which then make it into the Reports.The summary portions ... [...]

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What A Steeper Curve Really Means

2019-06-07 | Jason Goepfert


Curve steepensInvestors are fairly obsessed with the yield curve and its potential message for all markets. The widely watched spread between 2- and 10-year Treasuries neared inversion but has quickly reversed and hit its highest level in 6 months.The steepening is often what causes trouble, but ... [...]

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Thursday Color - Bond Moves, Yield Curve, Jobs, REITs & Utes, New Highs, Mexico

2019-06-06 | Jason Goepfert


Here's what's piquing my interest so far today.StretchedThe massive move in bonds continues to get a lot of attention, and for good reason. We saw the other day that it's relatively unusual to see a new high in bonds (low in yields) with an explosion in volatility, and that has been a good sign ... [...]

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Tuesday Color - Bond Volatility And Optimism, Gold, Flows, Tech Breadth

2019-06-04 | Jason Goepfert


Since we won't be publishing a Daily Report today, we're going to send this Premium Note to all members.This is similar to what's published most days around midday. It's essentially my notebook of things I'm looking at during the day, some of which make it into the Daily Report. There tends to ... [...]

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A Sign Of Irrational Pessimism

2019-05-31 | Jason Goepfert


Irrational pessimismIndividual investors keep getting more pessimistic. While stocks have had a bad week, investors’ pessimism is extremely high given the mild pullback in stocks.There haven’t been many times investors were as negative as they are now when the S&P was still sitting within 5% of ... [...]

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Friday Color - More Gaps, Peso, Outflows, Bond Binge

2019-05-31 | Jason Goepfert


Here's what's piquing my interest on yet another big gap down day.Gap ManAnother unexpected Tweet by the president pushed stocks lower immediately on Thursday and that anxiety has carried over into this morning. Stock futures are on track to gap down by more than 1%, the latest in a long string ... [...]

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Thursday Color - Junk Flow, Stocks vs Bonds, Anxiety Alerts, Sector Breadth

2019-05-30 | Jason Goepfert


Here's what's piquing my interest on a lackluster rally attempt day.Fleeing JunkInvestors have pulled more than $1.7 billion from the two primary high-yield (junk) bond funds, HYG and JNK, over the past two sessions. That's tied for the 3rd-most outflow in their history of a little over a ... [...]

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5 Signs Of Anxiety

2019-05-21 | Jason Goepfert


Anxiety signalWhile stocks have struggled, bonds and the dollar have both been rising. Whether one is helping the other is beside the point – primarily it suggests nervousness on the part of investors.When those two markets have behaved like this over the past 40+ years, stocks have usually ... [...]

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Friday Midday Color - Bonds, Renewed Momo, Overseas Extremes

2019-05-17 | Jason Goepfert


Here's what's piquing my interest as traders try to end the week on an up note.PanickyThe pre-market nerves are continuing. We've touched on this a few times this week, and traders continue to push futures down before the open of regular trading hours. Over the past 10 days, the average gap in ... [...]

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IPO Fervor Returns

2019-05-03 | Jason Goepfert


Overseas out, bonds inNear the end of April, investors fled non-U.S. equity funds, with the 2nd-largest outflow in five years. That has been a good contrary indicator in the past.At the same time, they moved more into bonds, with other measures confirming the increasingly consensus sentiment ... [...]

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Thursday Midday Color - More Bond Bulls, Hefty Flows

2019-05-02 | Jason Goepfert


Here's what's piquing my interest so far on a weak day.More Bond BullsWe saw on Tuesday that U.S. consumers showed a big jump in expectations that bond yields would drop (prices rise), and that's been a bad bet lately. More evidence comes from a survey we've looked at a few times over the years, ... [...]

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Wednesday Midday Color - Bond Bulls, High-Yield Breadth, Lagging S&P Stocks, Tech Values

2019-04-24 | Jason Goepfert


Here's what's piquing my interest so far today.Bond BullsThe rush into long-term Treasury ETFs has been really something. Four of the largest funds have increased their shares outstanding by more than 15% in just the past week. The last couple of times, that coincided with short-term exhaustion ... [...]

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Monday Midday Color - Smart Money, Biotech, Options Optimism

2019-04-22 | Jason Goepfert


Here's what's piquing my interest so far on a quiet Easter Monday session.Smart MoneyLast week, hedgers continued to build up their positions in some of the agricultural contracts. In corn, they went net long by more than 94,000 contracts, the most since 2017. That's more than 5% of open ... [...]

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Thursday Midday Color

2019-03-28 | Jason Goepfert


Here's what's piquing my interest so far on this fading rally day.Breadth ReviewThere was a spike in the number of stocks on the Brazilian Ibovespa exchange falling below their lower Bollinger Bands. This happens when stocks are trading in a relatively narrow range then suddenly ... [...]

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Extreme Greed As Utilities And Yields Forge Unholy Alliance

2019-02-05 | Jason Goepfert


Extreme greedThe CNN Fear & Greed proxy model has moved further into optimistic territory, now showing Extreme Greed, pushed higher by most of the components in the model.Other times it has become this stretched in a downtrend, future returns were almost exclusively negative. There were 99 days ... [...]

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Nonfarm Payroll Beat

2019-02-01 | Jason Goepfert


The Nonfarm Payroll Report (NFP) is widely believed to be the most important economic report in the U.S., or at least the one with the most sway over markets.This morning's release showed a huge positive surprise, "positive" being many more jobs added than expected. There was a big revision down ... [...]

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Highly Correlated Markets; Non-Recessionary Bear Markets

2019-01-24 | Jason Goepfert


This is an abridged version of our Daily Report.Highly correlatedOver the past 50 days, markets have been closely following each other. The moves in the S&P 500 have been tight with commodities, yields, and overseas stocks.This has usually happened during times of stress, and long-term returns ... [...]

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High Correlation Among Assets

2019-01-23 | Jason Goepfert


Over the past couple of months, the correlation between assets domestic and overseas has spiked. The S&P 500 has had a 50-day rolling correlation above 0.8 (on a scale from -1.0 to +1.0) to 10-year Treasury yields, commodities, and world stocks. As noted by the Wall Street Journal, spikes in ... [...]

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The Anti-Hindenburg Omen; Fed Recession Risk Rises

2019-01-16 | Jason Goepfert


This is an abridged version of our Daily Report.The anti-HindenburgA compelling reason for caution last fall was the kind of split market that triggered a cluster of Hindenburg Omen warning signs. Over the past two weeks, there has been a cluster of signals that are the exact opposite of the ... [...]

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Disappointed Economists; A Weak Leading Index

2019-01-15 | Jason Goepfert


This is an abridged version of our Daily Report.DisappointedConcerns about an economic or earnings recession have skyrocketed over the last couple of months, and disappointing economic reports worldwide are not helping. Economic surprise indexes across the world are all below zero, and the most ... [...]

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New Low Decline As An "All-Clear"; Junk Bond Surge

2019-01-09 | Jason Goepfert


This is an abridged version of our Daily Report.All is not clearIn December, more than 40% of securities hit a 52-week low. That has since collapsed to fewer than 0.4% of issues, the 2nd fastest and most dramatic reversal in history.If we relax the thresholds, using more than 30% new lows as the ... [...]

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Equity Risk Premium Collapses; A Day Of Notable Moves; VIX Not Jumping

2018-12-20 | Jason Goepfert


This is an abridged version of our Daily Report.Equity premium collapsesThe premium that investors are willing to pay for stocks’ earnings has collapsed relative to the yield available on bonds. The one-year z-score of the Equity Risk Premium is now 4 standard deviations below average, a ... [...]

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Financials' New Lows; Bank Loan Pessimism

2018-12-11 | Jason Goepfert


Among all the carnage over the past week, Financials have been among the hardest hit. Despite the attempted reversal on Monday, many of the stocks in this sector either didn't participate, didn't fully reverse, or sunk so far during the morning that they still hit their lowest level in at least ... [...]

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Bonds On Sale; Hedge Fund Exposure; Persistent New Lows

2018-12-10 | Jason Goepfert


This is an abridged version of our Daily Report.Bonds on saleA popular intermediate-term corporate bond ETF was trading this week at a price (relatively) far below its underlying value.Big discounts on liquid ETFs are rare, and often a good contrary indicator. Over its nearly 10-year history, ... [...]

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Yield Curve Inversion; Intense Selling; November Flows

2018-12-05 | Jason Goepfert


This is an abridged version of our Daily Report.Upside downThe yields on 2- and 3-year Treasuries are now higher than 5-year maturities, an inversion of the short end of the yield curve.This tends to precede an inversion of the more common 2-year vs 10-year yields. But there has been a long lead ... [...]

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Fear And Loathing In Bonds; Energy Apathy

2018-11-15 | Jason Goepfert


This is an abridged version of our Daily Report.Fear and loathing in junk bondsHigh-yield bonds had a very bad day on Tuesday, with extremely poor breadth and sentiment.On Tuesday alone, nearly half of all high-yield bonds declined on the day, they went from an almost even number of 52-week ... [...]

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An Almost-Thrust; Bond Boondoggle

2018-11-09 | Jason Goepfert


This is an abridged version of our Daily Report.An almost-thrustAt the end of October, volume was flowing overwhelmingly into declining stocks, pushing the Up Volume Ratio into oversold territory. That has now changed, and the switch has been aggressive enough to (almost) trigger a traditional ... [...]

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No Flight To Safety In Bonds; Investors Have Turned Pessimistic

2018-11-05 | Jason Goepfert


This is an abridged version of our Daily Report.Bond market movesBonds sold off along with stocks during the last two big pullbacks this year, showing no flight to safety. That is unlike 2016 when bonds rose as stocks declined.Historically, when bonds declined along with stocks during a selloff, ... [...]

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Rate-Sensitive Divergence With Yields As New Lows Climb

2018-10-10 | Jason Goepfert


This is an abridged version of our Daily Report.Rate-sensitive divergence warningAs yields rise, the Financial sector is badly underperforming Utilities, which is atypical.Historically, there has been a strong positive correlation between rates and the ratio of Financials to Utilities. When a ... [...]

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Bond Losses Trigger Pessimism

2018-10-09 | Jason Goepfert


This is an abridged version of our Daily Report.Bond losses trigger pessimismGovernment bonds have suffered consistent losses for a record amount of time. Treasuries haven’t scored a new high in more than two years, the longest stretch in 45 years. That has caused investors to flee bond ... [...]

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Momentum Shift As Bonds Have Big Move

2018-10-08 | Jason Goepfert


This is an abridged version of our Daily Report.Momentum shiftThe McClellan Summation Index is below zero for the first time in a half-year.It’s also turning negative while stocks are still relatively close to their recent highs, and that has been more of a negative shorter-term.Bonds’ biggest ... [...]

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Yields Not Nudging Dollar As Black Swans Get Priced In

2018-09-20 | Jason Goepfert


This is an abridged version of our Daily Report.Dollar dips despite rate riseThe yield on Treasuries has jumped, but it’s not resulting in a perkier dollar, even though the two usually move in broadly the same direction.The two markets do sometimes decouple, and that has usually led to more ... [...]

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Bond Market Moves

2018-09-19 | Jason Goepfert


Bonds are getting hit again today, after already suffering a few weeks of declines. The move has been enough to push the Optimism Index for bonds down to one of its lowest levels in 15 years.Forward returns in the TLT exchange-traded fund have been excellent the few other times sentiment got ... [...]

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Everything "Emerging" Has Declined As S&P Holds Firm

2018-09-07 | Jason Goepfert


This is an abridged version of our Daily Report.Nowhere to hideEmerging market stocks, bonds, and currencies have all declined steadily this year.The three asset classes have declined for an average of 150 days since they peaked, ranking among the longest, broadest declines in 30 years. Similar ... [...]

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High-Yield Bonds Overbought As U.S. Stocks Beat The World

2018-08-14 | Jason Goepfert


This is an abridged version of our Daily Report.Junk bonds are anything butHigh-yield bonds have been among the best performers short- and long-term. That has led to an extreme overbought reading in the Relative Strength Index as well as a 52-week high in the iBoxx Liquid High Yield Index.That ... [...]

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Yield Curve Favors Defense As ETF Investors Flee Developed Markets

2018-08-02 | Jason Goepfert


This is an abridged version of our Daily Report.Curve favors the defenseA narrow yield curve has led to good returns in defensive sectors. By the time the spread between 2-year and 10-year Treasury yields got as low as it was in July, future returns in the dollar were muted to negative, leading ... [...]

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Treasury Yields Break Tight Range As Metal Sentiment Sours

2018-07-25 | Jason Goepfert


This is an abridged version of our Daily Report.Treasury yield range expansionThe Bollinger Bands on 10-Year yields tightened the most since 2007 as bonds drifted for a month.But then yields broke decisively to the upside, which has usually led to still-higher rates.Precious metal ... [...]

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Gold Sentiment Sours As High Yield Bonds Near Positive Change

2018-07-24 | Jason Goepfert


This is an abridged version of our Daily Report.Gold sentiment soursOptimism on gold dropped to one of its lowest levels in its 7-year bear market, and the lowest since December 2015.When holding through all days when sentiment was this low, gold’s returns over the next few months were ... [...]

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Nasdaq's Record Reversal As Black Swans Go On Sale And Yields Rise

2018-07-18 | Jason Goepfert


This is an abridged version of our Daily Report.A record reversalThe Nasdaq 100 fund has never enjoyed as large a recovery as it had on Tuesday. The QQQ fund opened Tuesday’s trading down more than 1%, then reversed to close at a 52-week high, something it’s never done before. The underlying ... [...]

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Emerging Market Bond (And Stock) Rout

2018-06-20 | Jason Goepfert


This is an abridged version of our Daily Report.Emerging market bond routU.S. high-yield bonds have outperformed emerging market bonds by 7% in 50 days.Such wide spreads have led to rallies in emerging market bonds more than U.S..Stock rout, tooEmerging market stocks have lagged U.S. stocks by ... [...]

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Emerging Market's Negative Surprises Even As Nasdaq Hits June High

2018-06-15 | Jason Goepfert


This is an abridged version of our Daily Report.Emerging disappointmentEconomic surprises in emerging markets have been consistently, and increasingly, negative.That has led to mostly poor returns in emerging market stocks and currencies. It has been better for emerging market bonds (in ... [...]

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Corporate Bonds Diverge As Small Businesses See Record Optimism

2018-06-13 | Jason Goepfert


This is an abridged version of our Daily Report.Bond market battleThe spread on high-yield bonds has sunk to a multi-year low, while investment-grades are at a year high. That is exceptionally unusual, as corporate spreads typically move more or less together.It seems like it should be a good ... [...]

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Fund Flows Into Ultra-Safe Bonds As Companies Enjoy Record Trust

2018-06-06 | Jason Goepfert


This is an abridged version of our Daily Report.ETF investors are loving bond fundsBond funds have dominated the ETF inflow list lately, especially short-term government Treasury funds. The Technology sector is the only one that has seen large, and consistent inflows among sectors.Broad ... [...]

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Big Thrust In Up Volume As Junk Bond Metrics Diverge

2018-05-31 | Jason Goepfert


This is an abridged version of our Daily Report.Kind of a thrustWe still haven’t had a “breadth thrust” with more than 90% of NYSE volume flowing into advancing stocks. But Wednesday’s session had the best ratio since November 2016, nearly 400 sessions ago.A big Up Volume figure for the first ... [...]

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Corporate Bonds Suffer As Small Caps Shrug Off Economic Reports

2018-05-17 | Jason Goepfert


This is an abridged version of our Daily Report.Bloodbath in bondsCorporate bonds have been hammered, with Tuesday seeing the worst breadth readings since 2008 and 2013. Those two crises (the financial meltdown and the end of QE) were the only ones that matched Tuesday’s carnage.Forward returns ... [...]

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Russell Breaks Out But Suffers Buying Climax

2018-05-15 | Jason Goepfert


This is an abridged version of our Daily Report.Small-caps follow breadth to new highsThe Russell 2000 hit a new all-time high intraday on Monday. That’s the first 90-day extreme, high or low, for the index in more than three months.A move to new highs after that long, and with such positive ... [...]

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Bonds And Consumer Staples Are Battered As Stocks Rebound From Bad Start To Year

2018-05-04 | Jason Goepfert


This is an abridged version of our Daily Report.Bonds have been batteredA total bond market index has suffered one of its worst declines in decades since the peak last September. It has rallied during less than 1/3 of all weeks over the past 8 months, the worst stretch of selling in 40 ... [...]

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Bond Aren't Buffering Stocks As Earnings Surprises Near Record

2018-05-02 | Jason Goepfert


This is an abridged version of our Daily Report.Balanced portfolios see unusual lossesOver the past few months, there was a 5-year high in days where stocks sold off and bonds did too.That raises worries that the typical 60/40 stock/bond portfolio allocation will suffer as bonds don’t lift when ... [...]

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A Long Correction As Bond Yields Hit Overbought

2018-04-26 | Jason Goepfert


This is an abridged version of our Daily Report.The correction that won’t endRallies keep failing, and the S&P is now more than 50 days into its correction.A lengthy time in correction territory has led to some severe declines, but even more rallies. Times when the S&P recovered quickly from a ... [...]

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Smart Money Sells As Rates Pick Up

2018-04-20 | Jason Goepfert


This is an abridged version of our Daily Report.Smart money keeps sellingThe Smart Money Flow Index is not improving, as late-day sellers continue to show up. Assuming that means large, “smart” money managers are getting out (an iffy conclusion), it’s a warning sign.The only time in 35 years it ... [...]

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Corporate Bonds Struggle As Newsletter Writers Retrench

2018-03-29 | Jason Goepfert


This is an abridged version of our Daily Report.Corporate bond strugglesOver the past 30 days, investment-grade corporate bonds have had some of the worst breadth readings in 13 years. Fewer than 42% of bonds advanced, and more than 12% of them hit 52-week lows on average.Forward returns after ... [...]

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VIX Jumps 20% Again As Rates Lose 50-Day

2018-03-23 | Jason Goepfert


This is an abridged version of our Daily Report.A questionable precedentA month ago, we saw that after a 10% decline, the Dow Industrials was most closely tracking “good” corrections. That has started to change in recent sessions, and now the closest precedent is from November 2007.Double ... [...]

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Elevated Volatility As Bond Investors Pay Up

2018-03-07 | Jason Goepfert


This is an abridged version of our Daily Report.Well above averageVolatility expectations via the VXO (old VIX) have been more than 1 standard deviation above average for 30 straight days.That ranks as the 12th longest streak in 30 years and 3rd longest since the 2009 bottom. Stocks did well ... [...]

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Hated Bonds As U.S. Economy Out-Surprises Eurozone

2018-03-01 | Jason Goepfert


This is an abridged version of our Daily Report.Survey says: sell bondsRecent surveys of diverse investor groups show nearly universal expectations for higher rates (lower bond prices). An average of different surveys is the most extreme since 2005.Other extremes mostly led to lower interest ... [...]

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Shades Of '87 In Stock/Dollar/Rate Moves As 50-Day Fails

2018-02-22 | Jason Goepfert


This is an abridged version of our Daily Report.Shades of ’87 (among others)Over the past year, stocks have rallied, and the dollar has collapses as the Fed raises rates.That is similar to 1987, but there were also other dates that didn’t lead to nearly such dramatic results. After similar ... [...]

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Best Recovery Ever As Investors Flee Bonds

2018-02-16 | Jason Goepfert


This is an abridged version of our Daily Report.Best recovery everAfter falling into a correction a week ago, the Dow Industrials index has rallied every day and added 5.6%. That ranks among its best-ever recoveries after falling more than 10% below its high for the first time in months.Other ... [...]

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S&P Jumps Multiple Days As Volatility Halves

2018-02-15 | Jason Goepfert


This is an abridged version of our Daily Report.What a difference a week makesThe S&P 500 has jumped more than 1% on 3 out of the past 4 sessions. That buying thrust comes on the heels of a multi-month low during a bullish long-term trend.Future shorter-term returns were skewed positive, a stark ... [...]

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High-Yield Pessimism Hits Other Assets

2018-02-10 | Jason Goepfert


This is an abridged version of our Daily Report.Heavy selling in high-yieldMost of the measures we track for the high-yield bond market are getting stretched. This week, there was some of the most indiscriminate selling in over a decade.Future returns have been very positive after similar ... [...]

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Panic And Reverse

2018-02-07 | Jason Goepfert


This is an abridged version of our Daily Report.Panic and reverseStocks suffered a panic day on Monday, then reversed early losses to close higher. That matches several other instances that led to consistent returns going forward.There was volatile back-and-forth then another run at the prior ... [...]

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Easy Conditions As Traders Short More VIX

2018-02-02 | Jason Goepfert


This is an abridged version of our Daily Report.Easy conditionsA major measure of national financial conditions just reached a historic level of easiness because “it’s all good.”This is despite a sharp jump in interest rates, which is peculiar behavior. That seems like it should be a good sign, ... [...]

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Dollar Ignores Rates As S&P Shows Exhaustion

2018-01-26 | Jason Goepfert


This is an abridged version of our Daily Report.Ignoring the rise in ratesDespite a steady rise in interest rates, the U.S. dollar has declined more than 10% over the past year.That’s unusual, especially given the magnitude of the fall in the dollar and the rise in rates. The other times it ... [...]

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Yield Inversion As Utilities Correct

2018-01-11 | Jason Goepfert


This is an abridged version of our Daily Report.Yield inversionThe yield on 2-year Treasury Notes is now higher than the dividend yield on the S&P 500. That’s the first time in 10 years, causing consternation among some who only look back that far, since it preceded the financial crisis.But ... [...]

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Bond Spread Divergence As Bitcoin Halts Slide

2017-12-27 | Jason Goepfert


This is an abridged version of our Daily Report.A tale of two spreadsThe spread for investment-grade bonds has dropped to a new low, while high-yield spreads remain above their lows, suggesting some hesitation among bond investors to embrace the highest-risk issuers.That divergence has led to ... [...]

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Yields Rise As Leveraged Speculation Hits Record

2017-12-21 | Jason Goepfert


This is an abridged version of our Daily Report.So much for a safe havenEven as stocks have wobbled, bonds have sold off hard for three straight days and yields are at a 6-month high. Similar moves led to consistent declines in yields going forward, but that’s because of the long-term bear ... [...]

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SPY Streaks And Twitter Updates

2017-10-04 | Jason Goepfert


For those who don't follow the premium Twitter account, which you have access to if you're receiving this message, following are some of the studies and indicators that have been posted over the last couple of days.On Wednesday, SPY notched 7 higher closes and a new high, which has led to ... [...]

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Everything Is Rallying On FOMC Decision

2016-09-21 | Jason Goepfert


After the FOMC announcement on their rate policy and outlook, pretty much everything is rallying. It's odd to see stocks, bonds, gold and commodities all enjoying relatively large gains, because they tend to react differently to economic inputs.Regardless, there have been 12 times since the ... [...]

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TLT Moves To A New High As Traders Rush Into Bonds

2016-06-10 | Jason Goepfert


One of the more remarkable moves in markets today is in bonds. The most popular fund tracking the market, TLT, gapped up more than 0.5% (a large open for that fund) and traded to a all-time high.Gaps in a fund like that often indicate "get me in" buying interest among less sophisticated ... [...]

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Large Loss On Nonfarm Payroll Day

2016-02-05 | Jason Goepfert


Assigning a reason to why a market is up or down on any particular day is typically a fool's errand. That's especially the case with stocks when so many inputs are coming together in a highly liquid market.An initial knee-jerk reaction to an economic report or news event can often be pointed to ... [...]

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Stocks, Gold And Bond Yields All Rally On Rate Hike

2015-12-16 | Jason Goepfert


There is still time before the close, but so far on the day we're seeing stocks and gold rally, while bonds sell off.The S&P 500, gold and 10-year Treasury note yield are all up by more than 0.5% on the day. The knee-jerk assumption from that would be that traders are pricing in higher ... [...]

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Largest Discounts On High-Yield Closed-End Funds

2015-12-15 | Jason Goepfert


As noted in last night's Daily Sentiment Report, the average discount on the 15 high-yield closed-end funds with the longest history is near its lowest point in its history.For those who are looking to sort through that mess to find potential trading or investment ideas, Figure 1 shows a screen ... [...]

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High-Yield ETF Discounts Hit Extreme Levels

2015-12-11 | Jason Goepfert


In Thursday's Daily Sentiment Report we took a look at sentiment towards HYG and JNK, the two most popular funds that focus on the high-yield bond market.As of yesterday, sentiment was showing some modest signs of "not optimism" but at prior short- and medium-term lows, traders had pushed the ... [...]

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Short-Term High-Yield Fund Getting Hit

2015-12-09 | Jason Goepfert


On a daily basis, we look through ETFs that are trading at premiums and discounts to their Net Asset Value.Several times over the years, we've looked at these disconnects as short-term opportunities. It's not unusual for closed-end funds to trade several percentage points away from the value of ... [...]

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