Tuesday, August 05, 2014

"You'll either love me or hate me" (something someone you're about to hate says)

The U.S. dollar is rising (called it two weeks ago), GLD and SLV are declining, and GDX/GDXJ just broke down. If these events don't have you a little concerned, they should. Something you can turn your attention too is a bearish ETF I've just started following that is short corporate bonds. In people's desperation for yields the corporate bond market has almost tripled in size since 2008. The Rabbit Hole and Zero Hedge have been posting articles recently regarding a possible correction in this market. They also quite rightly point to this as being "the Third Bubble." Any correction in the wider market would probably hit corporate bonds the worse. Below is the daily and weekly view of SJB.

Daily Chart for Short High Yield Bonds ETF (SJB)

Weekly Chart for Short High Yield Bonds ETF (SJB)  

Jakob Richardson © 2014