The Long Bull Market is showing signs of fatigue and is wrapping up most of its intrigue. Our posts of December 2 and December 6 will probably stand as a fitting long term take on where things were and are. Little more needs to be said. Yesterday’s extremely low volume rally was like watching a steer run back into the corral one more time after having had the gate be opened. kind of a memory trip.
I continue to watch the junk bonds and the long bonds for clues to how the unwind is going to unfold. Today two ETF’s are showing strength, VNQ and XHB, the poster boards for the real estate and home builder markets, they are taking advantage of the little hiccup down move in interest rates seen over the past week or two. That will end as embedded factors in the interest rate market will push the Long Bond higher. To that end we are for the first time, since the Treasury piled into buying junk bonds on April 9, 2020, adding short junk bond ETF’s “SJB” in the 17.50 price area, to our portfolio.
We also will continue to monitor the chart of the Dollar and Gold markets versus the FANG + Microsoft market and will post charts as that trade moves out of its wide base.