Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Currencies and Bonds Indicate a Bounce May Be Near

By

While we may still be in a "sell the rips" mode on an intermediate-term basis, the short-term may bring us a tradable rally in risk assets once certain support levels are reached.

PrintPRINT

Emerging markets debt still just below resistance.

The iShares Morgan Stanley Emerging Markets Bond ETF (NYSEARCA:EMB) was highlighted here in the last couple of weeks for having broken down below its support level (the 14-day moving average line) – which was to be read as being bearish for risk assets.

Today, EMB is still just slightly below the 14-day line, but it is working hard to re-capture it. Until it does, however, we have to continue to assign this tell a bearish label.


Click to enlarge

High-yield debt nearing critical support as well.

The SPDR Lehman High Yield Bond ETF (NYSEARCA:JNK) broke below its own moving average support (the 60-day moving average) over the last week – yet another bearish tell from the bond markets. The last hope for the bulls on this chart is for JNK to hold up above the 100% Fibonacci price projection line ("correction support") at $39.80. If it does manage to hold that level, then JNK can easily regain its bullish footing and start sending us more positive messages for the rest of the risk assets. If not, look out below!


Click to enlarge

Overall

I am starting to see some potential for risk assets to bottom out soon (today's bottom and rally is not the one of which I speak) and give traders a modest rally. That rally, unfortunately, will be one that is to be sold into in advance of yet another drop (not as bad as the recent sell-offs, however).



Twitter: @tttechnalytics

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE