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

Future Retirement Success

Stocks

Plenty of Strength in HY Bond A-D Line

by December 22, 2023
December 22, 2023
Plenty of Strength in HY Bond A-D Line

High-yield bonds tend to trade more like the stock market than like treasury bonds, and what’s more is that these high yield or “junk” bonds are terribly sensitive to liquidity conditions. That sensitivity works both ways. When money is so plentiful that even the most marginal quality investments can get some, that is a sign that liquidity is going to be plentiful for a while for all types of stocks. And when liquidity starts to dry up, these high-yield bonds tend to be the first victims.

Back in 2021, I highlighted the big bearish divergence evident between the higher price highs in the S&P 500 and the lower tops in the High Yield Bond A-D Line. That was a correct omen of the liquidity troubles to come in 2022. Things started looking better coming out of the October 2022 bottom, when we saw strength in this HY Bond A-D Line, but that strength eventually gave way to another bearish divergence versus the S&P 500 in the summer of 2023.

Now we are once again seeing great strength in this A-D Line, as it is going up at a very steep angle, and matching the price gains of the S&P 500 step for step. The message is that liquidity is plentiful, and should remain so for a while. There is no sign of a divergence yet, and I would expect that we shall see a divergence with prices before any real trouble gets started. That has been the track record for these data, which FINRA publishes going back as far as 2005.

One note about these data: You can access them daily at this link. FINRA does not post the data until very late at night for the preceding trading day, because evidently it takes a while to compile all of those statistics. FINRA also rejiggered that web site, changing the format so that it is easier for those who are adept at programming to be able to scrape the data automatically. It takes a while to learn to read through the multiple lines of data, but what you want is to fetch the “CORP” data series if you wish to replicate this chart yourself. Or you can sign up at our web site for our twice monthly McClellan Market Report or our Daily Edition, where we feature it periodically.

0
FacebookTwitterGoogle +Pinterest
previous post
More from Mish’s Outlook 2024 — S&P 500
next post
Buying Opportunity or Trend Reversal?

You may also like

Simple Way to Find Confluence FAST Using Moving...

November 14, 2024

Watch the Unemployment Rate – It Could Change...

October 27, 2023

Week Ahead: NIFTY Stares at Both Incremental Highs...

March 10, 2024

Netflix Gets Island Reversal On Earnings

April 19, 2024

CrowdStrike’s Epic Fail: Here are the Critical Trading...

July 23, 2024

This Sector Is Poised At A Crucial Juncture

November 18, 2022

Chevron: Navigating the Intersection of Technical Uncertainty and...

May 9, 2023

How to Spot the Perfect Buying Opportunity in...

September 24, 2024

What the Federal Reserve Doesn’t Do, The Bond...

October 5, 2023

DP Trading Room: Technology On Its Way Down?

July 10, 2023

    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

    • Lotus denies plans to close Hethel factory amid US expansion talks

      June 29, 2025
    • Top university degrees lose sway as tech employers prioritise job-ready skills

      June 29, 2025
    • Government urges supermarkets to make healthy food more appealing in bid to tackle obesity crisis

      June 29, 2025
    • Senate Republicans ram Trump’s ‘big, beautiful bill’ through key test vote

      June 29, 2025
    • Chief Justice Roberts sounds alarm on dangerous rhetoric aimed at judges from politicians

      June 29, 2025
    • Britain’s fastest-growing firms revealed for 2025: Dfyne, Nala’s Baby and Hawkstone lead the charge

      June 29, 2025

    Categories

    • Business (8,333)
    • Investing (2,081)
    • Politics (15,853)
    • Stocks (3,177)
    • 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