Thursday, July 11, 2019

US #CorporateBonds Review $LQD $HYG

US HG Bonds 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.

US High Grade Bond's overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

Everyone assumes Powell sets interest rates. Bad assumption. The Fed controls short term rates, reserve requirements, the discount window (nobody uses anymore), and rate paid on reserves held at the Fed, but that's about it. Cycles are in place to push interest rates higher. If central banks peg sovereign rate, it won't stop private sector debt from falling (rising rates). How long can CB peg public sector interest rates? That's debatable, but it's not forever.

What does this mean going forward? Sovereign rates held at artificial levels, while private sector debt rises.

Long Term High Grade Corporate Bonds 1850-1950

Long Term High Grade Corporate Bonds 1950-

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.