Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

HY Bond A-D Line Showing Liquidity Problem

by February 17, 2023
February 17, 2023
HY Bond A-D Line Showing Liquidity Problem

Early in 2023, the S&P 500 broke out above the year-long downtrend line that everyone has been watching, and it has been struggling a little bit in February 2023 trying to extend that breakout. While it looks like just a pause for the S&P 500, the underlying weakness is evident when we look elsewhere, especially among the investments which are the most vulnerable to liquidity problems, the high-yield corporate bonds.

HY bonds trade more like the stock market than like Treasury bonds, because HY bonds are subject to the same vicissitudes of financial market liquidity waxing and waning. FINRA publishes the data on advances and declines every day here, and it can give useful insights for the stock market. One can even make the case that the HY Bond A-D Line serves as a better canary in the coal mine than the composite NYSE A-D Line.

This A-D Line started showing us a big bearish divergence in late 2021, even ahead of the pretty big divergence in the NYSE’s A-D Line. That bearish divergence correctly foretold the awful market weakness we endured in 2022.

There is no bearish divergence showing now, but we are seeing a suddenly weak HY Bond A-D Line. It peaked on Feb. 2, 2023, the same day as the S&P 500, but, since then, it has been falling almost daily and has now dropped below its 5% Trend. Having it below that exponential moving average (EMA) is what happens during price downtrends.

The message is that financial market liquidity has suddenly left the building, and that this is going to come around and bite even the big-cap stocks. They can muscle aside the little guys for a while, like the big pigs at the feeding trough, but eventually it affects them too. The vulnerable ones are more useful in this respect, showing us that the liquidity is drying up ahead of time.

0
FacebookTwitterGoogle +Pinterest
previous post
Larger Pullback Could Be Forming
next post
How to Improve Your Trading by Limiting Your Options

You may also like

The Best Since 2000!

June 23, 2023

Sector Spotlight: Monthly Charts Suggest Downside Risk is...

November 2, 2023

Value Stocks Continued Strength Might Depend On One...

January 26, 2024

Microsoft (MSFT) Stock On the Verge of a...

October 25, 2023

Earnings Watch: Smart Setups in HD, PANW, and...

May 19, 2025

50% of S&P 500 Stocks Just Turned Bullish...

May 13, 2025

Simple Approach to Transform Your Trading

March 6, 2025

With The Top 10 Picks In The Stock...

February 19, 2024

S&P 500 Teetering On 100-Day Moving Average Support

August 9, 2024

It’s May, So Should We Go Away?

May 5, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Friday Feature: Savannah Legacy Academy

      June 27, 2025
    • The Supreme Court Is Right on Reading Opt-Outs, But That’s Not Enough

      June 27, 2025
    • Barrett eviscerates Jackson, Sotomayor takes on a ‘complicit’ court in contentious final opinions

      June 27, 2025
    • Trump would strike Iran ‘without question’ if it restarts nuclear weapons program

      June 27, 2025
    • Florida man indicted for ’86’ posts allegedly threatening to kill Alina Habba

      June 27, 2025
    • Top House Republicans send stern warning to Senate GOP as Trump’s ‘big, beautiful bill’ risks delay

      June 27, 2025

    Categories

    • Business (8,329)
    • Investing (2,079)
    • Politics (15,835)
    • Stocks (3,174)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved