4/13 Morningline: Indicators

Treasury long-term bonds, TLT, gapped up by 0.5% this morning and were trading narrowly at a level last seen on March 24.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
SPY $119.66
TLT $89.77

At 9:55 a.m. Eastern

Higher bond prices mean lower interest rates, suggesting that traders doubt the strength of the economic recovery.

Long-term bonds have been in a downtrend since mid-December 2008, with one major counter-trend rally in October 2009.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
VIX 16.15
JNK $39.80
GLD $112.50
USO $40.73
EEM $43.29
EUR/USD $1.3589
USD/JPY ¥92.80

At 9:59 a.m. Eastern

Blue-chip stocks (SPY) were within yesterday's trading range.

Bonds tend to be under-reported compared to stocks, and the narratives in the media don't always mesh well. My favorite occasion was the Black Monday crash of 1987, when stocks lost 23% in one day.

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On the AP wire, the stocks story blamed the crash on a weak bond market, and the bonds stories blamed the stock market for weakness in bonds.

In today's trading, somewhat oddly, high-yield corporate debt (JNK) were trading only slightly above yesterday's close. The main meaning of junk bond prices is the likelihood of default: The higher the price, the greater the chance, in traders' mind, that the debtor corporation won't be good for its debt.

Both gold (GLD) and oil (USO) are trading lower. The U.S. dollar dropped sharply against the Japanese yen (USD/JPY), traversing 0.9% high to low intraday.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

Exchange-Traded Fund Symbols:
EEM - emerging markets
EUR/USD - euro/dollar currency pair
GLD - gold
JNK - high-yield corporate bonds
SPY - blue-chip stocks
TLT - Treasury long-term bonds
USD/JPY - dollar/yen currency pair
USO - crude oil
VIX - fear index

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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