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Mish’s Daily: The New Year Could Be All About Junk Bonds

Now that we are one day into the new year, there are 2 pieces of advice we can give you.

The first is to learn a strategy–and then become a specialist in that strategy. For example, why not pick phases? We love them. Mish wrote a book on them. And, once you understand the phases on a daily and weekly timeframe, your trading will vastly improve.

Secondly, learn to follow bonds. Sure, short-term bonds work well as do the 20+ year long bonds. However, we are all about the high yield high debt junk bonds. We basically use the bonds to determine risk on/off. And we find that quieting the noise, especially with the dreary forecasts for this year, helps us trade a lot better.

The chart of HYG (or JNK, if one prefers) has been an excellent guide to the short and long-term market moves. It also keeps us out of harm’s way during the chop.

In June 2022, HYG bottomed. So did the market. Then, HYG had a phase change in July but could not quite get going enough to clear the 200-DMA. And so, the market sputtered. Then, the sharp reversal candle in October gave traders a good bottom risk point. The ensuing rally took the price right up to the December high and the 200-DMA.

Currently, HYG sits right under the 50-DMA. It also closed green on a red day in the indices. That tells us that risk appetite remains regardless. HYG outperforms the SPY, and the momentum had a bullish cross while the momentum trades above the moving averages. And, most importantly, as experts in phases, it tells us to watch that 50-DMA carefully.

For more detailed trading information, contact Rob Quinn, our Chief Strategy Consultant, to learn more about Mish’s Premium trading service or our other trading services during a brief consultation.

“I grew my money tree and so can you!” – Mish Schneider

Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish discusses how to sharpen your trading skills for 2023 in this video for Business First AM.

In this special StockCharts TV presentation, Mish teaches you how to use four simple and reliable key indicators to help you catch big swings in the market.

In this appearance on Business First AM, Mish discusses why she’s picking Nintendo (NTDOY).

Mish sits down with Gav Blaxberg for a W.O.L.F podcast on what she has learned as a trader and teacher.

In this appearance on Business First AM, Mish explains how even the worst trade should not be too bad with proper risk management.

In this appearance on Real Vision, Mish joins Maggie Lake to share her view of the most important macro drivers in the new year, where she’s targeting tradeable opportunities, and why investors will need to keep their heads on a swivel. Recorded on December 7, 2022.

Mish sits down with CNBC Asia to discuss why all Tesla (TSLA), sugar, and gold are all on the radar.

Read Mish’s latest article for CMC Markets, titled “Two Closely-Watched ETFs Could Be Set to Fall Further“.

Mish talks the current confusion in the market in this appearance on Business First AM.

Mish discusses trading the Vaneck Vietnam ETF ($VNM) in this earlier appearance on Business First AM.

ETF Summary

S&P 500 (SPY): 375 support and 384 resistance.Russell 2000 (IWM): 170 pivotal support and 175 resistance.Dow (DIA): 325 support and 334 resistance.Nasdaq (QQQ): 260 support and 267 resistance.Regional banks (KRE)): 56 support and 61 resistance.Semiconductors (SMH): 196 support and 205 resistance.Transportation (IYT): 210 pivotal support and 215 now resistance.Biotechnology (IBB): 127 is pivotal support and 133 overhead resistance.Retail (XRT): 57 pivotal support and 63 now resistance. Holding 60.

Mish Schneider

Director of Trading Research and Education

Wade Dawson

Portfolio Manager

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