Thursday, June 27, 2019

Quality Spread Review #Investing #Bonds #Cycles

Quality Spread Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Quality Spread's overall trend, revealed by trends of price, leverage, and time, defined and are discussed in the long term cycles section of The Matrix for subscribers.

Subscriber Comments

The Moody's quality spread, the spread in yield between high quality and junk corporate bonds, does receive a lot of attention, but the computer tracks it closely. It knows when junk bonds are under performing their high quality counterparts, the quality spread is rising and bad things often happen (see Quality Spread Oscillator). Bad things could be political, social, sudden stock market decline, or spike in gold prices. I suspect this is one of the reasons why gold is quietly rising. Don't worry, the computer tracks it daily, and while the trend is a monthly observation, it is incorporated into confidence and a key sub component of the Economic Activity Composite (EAC).

Quality Spread Oscillator

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