Using High Yield Bond As Early Warning for The Stock Market
The bearish divergence between high yield bond and S&P 500 shows the stock market weakness in advance.
Find out how to use high yield bond (HYG) to better anticipate the stock market and why it is effective tool to assess the market liquidity below:
Click and watch the video below on YouTube (Pro Tip: adjust the speed to 1.5–2X):
Last Friday the bearish bar broke below the intermediate support level at 4450 suggested a test of the low formed by the selling climax as a secondary test (ST). So far, S&P 500 is still in a trading range between 4250–4600.
Meanwhile, oil related stocks still outperform where there are many valid low risk trade entry setups with decent reward to risk ratio thanks to the strong crude oil price. Upside follow through is likely to continue for the oil stocks.
Safe trading.
Ming Jong Tey
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