Karpel’s Corner: Interest in Corporate Debt Plunging

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The Corporate Bond market ($HYG) is plunging right through the 200 day moving average without even looking back.

When traders start to get out of this “Junk,” this is a sign of growing fear. Traders who had an appetite for risk over the past 2 years are now looking for cover. Plus, for the first time that I can remember, the Corporate Bonds are under-performing Government paper ($TLT) by the largest margin in years.

I do not want to sound like Chicken Little with any “sky is falling” predictions. But when I have seen selling of these Corp Bond stocks like I have recently, this does not bode well for the market. Small Caps ($IWM) and Treasuries ($TLT) continue to disappoint in spite of upbeat economic data. This is not a recipe for steady-as-she-goes kind of trade for the new trading month.

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See you next time at the Corner!