Seeking Alpha

John Kosar's  Instablog

John Kosar
9 Followers
1 Following
Send Message
John Kosar, CMT, is Director of Research of Asbury Research LLC (http://www.asburyresearch.com/). Since 2005 Asbury Research has been providing in-depth, comprehensive financial market research to professional investors that understand the value and importance of incorporating technical,... More
My company:
Asbury Research LLC
My blog:
Logic-Over-Emotion Investing
  • Credit Spreads Key To Near Term Market Direction 0 comments
    Feb 17, 2013 4:30 AM

    The following (green highlights) is one of the 10 charts and corresponding commentary/analysis from our Monday February 11th Keys To This Week report (access requires subscription, click here to view a sample report).

    Excerpt From: Keys To This Week
    Subject: The US Stock Market, Key #5 of 12
    Date: February 11th, 2013

    Topic: Credit Spreads, High Yield/BAA Corporate Bond Spread

    The red line in the upper panel of Chart 2 below plots the BofA Merril Lynch US High Yield Master II Option-Adjusted Spread daily since 2012.

    The rightmost pink highlights point out that the spread has been widening (actually, by 36 bps) since late January, while the rest of the pink highlights show that previous similar widenings have coincided with or led every near term peak in the S&P 500 (black bars, lower panel) during the past year.

    (click to enlarge)

    The longer this spread continues to widen, indicating that the bond market is pricing in an increase in credit or repayment risk for the companies issuing these bonds, the more likely we are likely to see another near term peak emerge in the US stock market.

    continued…

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Themes: bonds
Back To John Kosar's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Full index of posts »
Latest Followers

StockTalks

  • MSFT has already risen by 9% since our Oct 15th report on it, and is closing in on our $28.40 initial upside target.
    Dec 15, 2010
  • The SOX Index has declined by 9.95 or -2.4% in 2 days from 420-422. Failure to get above it should lead a correction in the SOX and the SPX.
    Dec 15, 2010
  • Today's divergence between Treasury prices and equity prices -- suggests one may be temporarily mis-priced.
    Sep 27, 2010
More »

Latest Comments


Most Commented
Posts by Themes
10-Year Notes, bonds, Canadian Dollar, Commodities, Crude Oil, CRUDE OIL, crude oil, crude oil. Energy Sector, Energy Sector, ENERGY SECTOR, Foreign Exchange, Gold, Inflation, Investor Sentiment, market-outlook, Materials, Materials Sector, Precious Metals, Relative Performance, S P 500, Semiconductors, Small Cap, T-Bonds, Technology, US Dollar, US Interest Rates, US Stock Market, US Stocks, US Treasuries, US Yield Curve
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.