Into Thin Air …

Yesterday’s action in IYR, looks like a breakout higher.

That is, until you look at volume.

Price action levitates higher while everyone leaves the party.

From the start of the last thrust higher on February 1st, volume has declined over 75%.

There are two possibilities:

  1. Buyers and Sellers are backing away; letting prices drift.
  2. There’s no bullish commitment at these levels; reversal imminent.

Two quotes that accurately sum up the overall market situation; from Johnny Bravo and Steven Van Metre respectively:

‘One thing or the other, something’s going to break’

‘This is pretty dangerous stuff going on here’.

Before we wrap up, we’ll add just one more thing.

Junk yields have sunk to record lows.

Why buy TLT at ‘relatively’ safe 1.55%, when you can have junk yield at 3.95%, that’s going to blow-up (launching TLT into the stratosphere) at any time.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

%d bloggers like this: