phillips49

Stocks / Bonds Intermarket Considerations

Old Trader,

As I understand the author, rising below grade bond prices as related to investment grade bond prices, indicate improving economic conditions. Comparing the price divergence of LQD to JNK since the 1st of March, shows rising below investment grade bond prices.
Not being bearish, to me doesn't necessarily mean bullish either. To me it means bearish is increasingly risky. Cautiously optimistic would be more appropriate.

Stocks / Bonds Intermarket Considerations

Thanks,

Good article. The last 30 days do show the divergence you speak of between investment grade and below investment grade bond prices (using JNK and LQD as proxies) and is also coincident with upward movement of stock prices. This would indicate improving economic conditions. Bearish is wrong place to be.

Don