Charts of Note
- Thread starter darkhorse
- Start date
The Fedâs âStupid Stimulusâ zero interest rate policy has created a stretch for yield that has affected a wide range of asset classes.
Treasury prices rallied to record levels (and corresponding low yields), corporate bonds â both investment quality and junk â have seen massive capital inflows, and dividend stocks have been bid higher as investors try to generate income.
While weâre not likely to see the FOMC hike rates anytime soon, traders appear a bit too optimistic about additional liquidity measures considering the relatively strong domestic economic data.
Treasuries are already beginning to back off (with corresponding rates increasing). As treasury rates increase, the effect trickles into the corporate bond world and also into high-yield equities. The presence of alternative income options could very well shift capital away from the high-dividend equity areas, triggering a reversion to the mean in terms of industry valuations.
Utility stocks have been in a bull market for well over three years now. Given the extended valuations, a shift in the fundamental dynamics could trigger an extended selloff â with plenty of opportunities for bearish swing trades along the way.
Read full commentary here...
Mining for paired trades with HOT and HST:
This chart is a screen shot from mid-session today. Annotations applied an hour later.
Having gone flat on a notable chart for a pairs trade started Aug 1, by legging out of it a number of days ago, an opportunity may commence to leg back in.
Opportunity may present again with
Shorting HOT
Long HST
This recommendation intended for only myself:
When the terminus of these stock plots are narrowed in half the current distance between them as shown on this chart, begin accumulation of new position.
Again:
The recommendation is intended for myself and not meant to be for anyone else;
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3609556>
This chart is a screen shot from mid-session today. Annotations applied an hour later.
Having gone flat on a notable chart for a pairs trade started Aug 1, by legging out of it a number of days ago, an opportunity may commence to leg back in.
Opportunity may present again with
Shorting HOT
Long HST
This recommendation intended for only myself:
When the terminus of these stock plots are narrowed in half the current distance between them as shown on this chart, begin accumulation of new position.
Again:
The recommendation is intended for myself and not meant to be for anyone else;
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3609556>
