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Some reads from Schwab _ Liz & company.

edited November 2021 in Other Investing


  • @Derf, there is no linkage to an article.

    No to hijack your posting here. Another article from Liz Ann Sonders on fed's tapering and the subsequent rate hike in 2022.
    The announced initial pace of the taper clears the way for the start of rate hikes sometime in the second half of the year; moving in line with the market having recently priced in two hikes by the end of next year. If the Fed maintains the pace of purchases laid out for at least the first two months of tapering, the process will conclude in eight months (June 2022). Assuming the Fed does not change its stated objective to finish tapering before initiating rate hikes, that would put the earliest rate hike to be in the second half. In Fed Chair Jerome Powell’s initial comments after the release of the statement, he said the tapering decision does not imply anything about raising the federal funds rate; saying the test for that is more “stringent.”

  • And this,
    The SP500 keeps on making higher highs, as the effects of QE4 are still being felt in the banking system, and in the stock market. But there is a troubling divergence among some of the most liquidity sensitive investment vehicles, the high yield corporate bonds. Their A-D Line was leading the way higher ever since the December 2018 bottom, but not any more.

    It is a “condition”, not a “signal”. The wise traders will accept this warning, and use it to help them look for the final moment when the uptrend in prices is at its end. And those same wise traders will also remember that divergences can sometimes rehabilitate themselves.
  • I like that McClellan chart of the hy divergence and had a look at others in their Chart in Focus series. All good stuff, IMHO worth signing up to receive weekly.
  • Thanks @Sven : I think I did this a time or two before.
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