- Blue chip stocks turn bearish on the fast stochastic (SPY).
- Fear index jumps above the 20-day, 200-day moving averages, shows bull phase on the fast stochastic, macd, parabolic sar and Person's Proprietary Signal. (VIX).
- High-yield corporate debt moves to bear phase on Person's Proprietary Signal and the parabolic sar (JNK).
- Crude oil moves to bear phase on the macd as the price drops below the 20-day moving average (USO).
| trend | sto | sto zone | pps | psar | macd | macd trend | ma20 | ma200 | |
|---|---|---|---|---|---|---|---|---|---|
| SPY | |||||||||
| QQQQ | |||||||||
| VIX | |||||||||
| TLT | |||||||||
| JNK |
Oil and Gold
| trend | sto | sto zone | pps | psar | macd | macd trend | ma20 | ma200 | |
|---|---|---|---|---|---|---|---|---|---|
| USO | |||||||||
| GLD |
| trend | sto | sto zone | pps | psar | macd | macd trend | ma20 | ma200 | |
|---|---|---|---|---|---|---|---|---|---|
| EUR/USD | |||||||||
| USD/JPY | |||||||||
| EEM |
Sometimes a cluster of signal produces a single narrative. This is such a day. It goes like this.
The fear index (VIX) has turned bullish across the board. A rising VIX means that blue chip stocks (SPY) are becoming more volatile, which usually indicates a fall. And indeed, the fast stochastic turned bearish on SPY as prices declined for a third day. Indeed, today's opening broke below the trading range that has held sway for a week.
The bear signals on high-yield corporate debt (JNK) points to the cause of the break. Traders are losing confidence in a continued business recovery -- do I hear, "double dip recession"? -- and so they are less confident that companies will be able to repay their debts.
And as a result, there will be less demand for crude oil (USO), which is also turning bearish.
By the way, why is it that when companies fail to pay their debts, they default on their bonds and we consider that to be just business as usual. But when individual people fail to pay their debts, we grow all shocked, shout "deadbeat!", and throw them in jail.
Oregon Public Broadcasting did a story this morning on people jailed for debt. Just asking why CEOs don't get the same treatment.
Indicator Exchange-Traded Fund Symbols:
EEM - emerging markets
EUR/USD - euro/dollar currency pair
GLD - gold
JNK - high-yield corporate bonds
QQQQ - Nasdaq 100 index
SPY - S&P 500 index
TLT - Treasury long-term bonds
USD/JPY - dollar/yen currency pair
USO - crude oil
VIX - fear index
Abbreviations:
- pps - Person's Proprietary Signal.
- psar - Parabolic Stop and Reverse
- ma20 - 20-day moving average
- ma200 - 200-day moving average
- macd - Moving Average Convergence-Divergence
- sto - Fast Stochastic
- trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways.
- sto: green for bull, red for bear.
- sto zone: green for overbought (80+), red for oversold (20-), yellow for neutral zone
- psar, pps, macd: green for bull mode, red for bear.
- macd trend: green for rising, yellow for sideways, red for falling. neutral.
- ma20, ma200: green for above the average by more than 1%, red for below the average by more than 1%, yellow for within 1% either side of the average.
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