High Yield Index – Option Adjusted Spread – September 21, 2023

My good friend Jerry over at https://growmytsp.com/ sent me a chart over last night and, using basic measured moves, you can see the “rhythm” and moves of this index. Since the low in 2022, it’s been the same percentage move UP and same percentage move DOWN. (green lines = up and red lines = down)

We are at, or perhaps a little lower, pretty significant support …

why is this important .. I’m not gong to bore you w/ fundamental analysis about credit spreads and all that when a picture paints a thousand words …the picture below is saying “when I bottom, the S&P tops.”

HYG – BUY pattern approaching / here UPDATE 04/10/20

HYG at a crucial level … KEY

04/10/2020 – trust everyone has a blessed and peaceful weekend. also, please keep staying safe. check in if you have the chance …

couple weeks ago, we showed VERY important support on the HYG and detailed how we can find a pattern by simply Projecting, Extending and Retracing. Where the ratio’s all come together then, well, support or resistance SHOULD (operative word) appear. as I have discussed on this blog, a bunch, it’s all PROBABILITY. No idea which will work or which won’t …in this case support held, the BYG liquidation stopped and the market rallied! GREAT … where are we now.

if you want to go down the worm hole which is Elliott Wave then first pay attention to the corrections! Learn em’ and then try to count subwaves for the rest of your life. I have found the EWT to be very helpful in CORRECTIVE PATTERN ID’ing. The most common? A three wave move that is against the overall trend.

we finished a 3 wave SELL PATTERN on Thursday and, if this level holds then expect the stocks to sell off again. note on the chart below … that’s a MONSTER BULLISH gap … pay attention to this ETF!

note the blue arrow projection – it’s equal in BOTH PRICE AND TIME. the market hit the 84.04 level and now, if the pattern works, it should start back down. a gap down below the gap (bearish island reversal) or a big move back thru it is not a good sign.

HYG is getting thumped. as people who are just starting to read my blog or are long time followers you recognize that, for me, it’s all about patterns. period.

don’t try to use any fundamentals (don’t understand them and not smart enough to …) and just try to find patterns. I love patterns … why? because, they give you a really good set of benchmarks or maps of where you are … when they work, you know where you are and, conversely, when they don’t you also know where you are …HYG is so important to the global financial structure.

i’m up early doing some blogging on the west coast and nothing is going on so I’ll say the 66-69 level is a KEY support level / BUY pattern on HYG. It needs to hold at these levels or things are going to get ugly. (like they aren’t already) buy how did we get 66-69?

P – E – R – PROJECT, EXTEND, RETRACE there are other methods to hone in on this level – square of 9, cycles work, etc. But doing a quick PER gives us a nice level and it’s early this AM so I’ll just leave it at her for now …folks, in the world of patterns it doesn’t get much better than this .. we have 6 ratio’s all coming together in the area highlighted below. trust me that equals a big deal. losing this level and something is definitely a foot at the circle K. that sure is a TON of thrust coming into this level … it does warn of a potential failure of this pattern


Orange: .618 ab=cd and Blue: ab=cd

EXTEND: took three key lows (rectangles) and extended fro those points … 2.236 is square root of 5

RETRACE – there she is, the .786 retrace right in/around the key level

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