SJB Update
Our last update, nearly two months ago, on SJB can be read by clicking here.
SJB is the Short Junk Bonds ETF.
Here's its chart (click to expand it):
Monthly momentum (not shown) has turned positive for the first time since mid-2014.
Quarterly momentum is set to turn positive for the first time in SJB's history, and it likely will after the first quarter of 2018.
While SJB usually trades inversely to the overall stock market, we like that it has remained relatively flat during the past few months while equities rallied virtually daily. We believe this shows comparative strength and reveals a bottom may be in evidence.
Certainly it'll turn much higher when stocks drop, and that's very long overdue.
Major trend changes often occur in conjunction with the changing of the calendar year. Further, markets have being going ever higher supposedly in ongoing anticipation of tax reform being enacted in the U.S.
The utterly over-hyped "tax reform" is in fact little more than a cynical farce changing almost nothing while pandering as always to special interest groups (and at the risk of upsetting many dear readers we're compelled to point out parents and homedebtors are major special interest groups - think about it), and will prove to have nothing of the promised economically stimulative effect.
It may, along with the end of 2017, ironically mark the end of an epic bull run fuelled on nothing more than debt and misplaced hope. And who knows what'll happen during or after the inevitable crypto-crash. How many will have been bitconned [sic] out of their life's savings?
We'll see.
In the meantime we already know that despite the "booming economy" and historically low interest rates somehow 2017 offered a new high in retail bankruptcies.
2018 should shatter that high in turn, and that too would boost SJB.
We'll add an unprecedented fourth SJB position when it trades above $23.40
Above that level the 20-month down trend shown in blue in the above chart will be broken, and thereafter it shouldn't be too long before the 6-year down trend in red is broken.
SJB is the Short Junk Bonds ETF.
Here's its chart (click to expand it):
Monthly momentum (not shown) has turned positive for the first time since mid-2014.
Quarterly momentum is set to turn positive for the first time in SJB's history, and it likely will after the first quarter of 2018.
While SJB usually trades inversely to the overall stock market, we like that it has remained relatively flat during the past few months while equities rallied virtually daily. We believe this shows comparative strength and reveals a bottom may be in evidence.
Certainly it'll turn much higher when stocks drop, and that's very long overdue.
Major trend changes often occur in conjunction with the changing of the calendar year. Further, markets have being going ever higher supposedly in ongoing anticipation of tax reform being enacted in the U.S.
The utterly over-hyped "tax reform" is in fact little more than a cynical farce changing almost nothing while pandering as always to special interest groups (and at the risk of upsetting many dear readers we're compelled to point out parents and homedebtors are major special interest groups - think about it), and will prove to have nothing of the promised economically stimulative effect.
It may, along with the end of 2017, ironically mark the end of an epic bull run fuelled on nothing more than debt and misplaced hope. And who knows what'll happen during or after the inevitable crypto-crash. How many will have been bitconned [sic] out of their life's savings?
We'll see.
In the meantime we already know that despite the "booming economy" and historically low interest rates somehow 2017 offered a new high in retail bankruptcies.
2018 should shatter that high in turn, and that too would boost SJB.
We'll add an unprecedented fourth SJB position when it trades above $23.40
Above that level the 20-month down trend shown in blue in the above chart will be broken, and thereafter it shouldn't be too long before the 6-year down trend in red is broken.
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posted by C. Guinness @ 4:21 PM
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