12 replies to this topic

[Rogerdodger]

From Decisionpoint.com
Chart In Focus - Tom McClellan
"The Fed's Permanent Open Market Operations (POMOs) have a bigger effect on pushing stock prices up and down than most people would like to believe.
The Fed decided in September 2011 to implement Operation Twist, which is an effort to change the shape of the Treasury yield curve by purchasing longer term debt and selling short term paper.
The amounts are supposed to offset each other, but the problem is that the purchases and sales are done on different days. This lumpiness of the Fed's activities shows up in the stock market's price movements, as this week's lead chart illustrates.
POMO schedule says that some big sales are coming up, events which will take money out of the banking system."

Edited by Rogerdodger, 20 February 2012 - 11:09 AM.

[Rogerdodger]

It looks like they will be selling 8 billion tomorrow (Tuesday) and Thursday.
Then buying 5 billion on the 27th & 28th (For a end of month ramp?)

http://www.newyorkfe...n_schedule.html

[TechMan]

Well, let's keep an eye on the yield curves.

Again, keeping in mind that the Fed IS the yield curve, period.

This is the Oct. 3 market bottom and Friday. That's one of the "forces" that's been driving the market.



This was the what the "Twist" had intended to do, but the stock market didn't respond favorably -- chart posted about 2 weeks ago.

The Junk Bonds, meanwhile, have started to roll over. While it's not a "leading" indicator, the divergence is always something worth keeping an eye on.

[Gary Smith]

Well, let's keep an eye on the yield curves.

Again, keeping in mind that the Fed IS the yield curve, period.

This is the Oct. 3 market bottom and Friday. That's one of the "forces" that's been driving the market.



This was the what the "Twist" had intended to do, but the stock market didn't respond favorably -- chart posted about 2 weeks ago.

The Junk Bonds, meanwhile, have started to roll over. While it's not a "leading" indicator, the divergence is always something worth keeping an eye on.

How is a index - the Merrill Lynch High Yield Master II Index- that made an all time historical high on Friday (which is apparently not reflected in your chart) considered to be rolling over? And even if it were rolling over, isn't an index that has been up something like 48 of the past 58 trading days entitled to a little give back?

[TechMan]

How is a index - the Merrill Lynch High Yield Master II Index- that made an all time historical high on Friday (which is apparently not reflected in your chart) considered to be rolling over? And even if it were rolling over, isn't an index that has been up something like 48 of the past 58 trading days entitled to a little give back?

First of all, Friday, 2/17/2012, is included in my chart.

Second of all, all time high was not made on Friday. According to my data, the prior all time high was made on 2/10/12, which was later matched on 2/15/12.

And finally, I said, "it's always worth keeping an eye on". I didn't say it's a leading indicator that's going to lead the market down, nor did I say that it's not deserving "a little give back". When the high on 2/15/12 had failed to exceed the 2/10/12 high, which was subsequently followed by 2 days of lower price, it's not far-fetched to call it "started to roll over".

Edited by TechMan, 20 February 2012 - 01:41 PM.

[Gary Smith]

How is a index - the Merrill Lynch High Yield Master II Index- that made an all time historical high on Friday (which is apparently not reflected in your chart) considered to be rolling over? And even if it were rolling over, isn't an index that has been up something like 48 of the past 58 trading days entitled to a little give back?

First of all, Friday, 2/17/2012, is included in my chart.

Second of all, all time high was not made on Friday. According to my data, the prior all time high was made on 2/10/12, which was later matched on 2/15/12.

And finally, I said, "it's always worth keeping an eye on". I didn't say it's a leading indicator that's going to lead the market down, nor did I say that it's not deserving "a little give back". When the high on 2/15/12 had failed to exceed the 2/10/12 high, which was subsequently followed by 2 days of lower price, it's not far-fetched to call it "started to roll over".

Your chart and data is then incorrect. The all time high on this index WAS on Friday February 17 at 856.287. Below is a cut and paste of the data from the Bank of America/Merrill Lynch site on the Merrill Lynch High Yield Master II Index.

1/26/2012 846.575
1/27/2012 847.299
1/30/2012 846.497
1/31/2012 847.525
2/1/2012 848.969
2/2/2012 849.570
2/3/2012 851.408
2/6/2012 852.809
2/7/2012 853.772
2/8/2012 855.303
2/9/2012 855.605
2/10/2012 853.789
2/13/2012 855.254
2/14/2012 855.612
2/15/2012 855.551
2/16/2012 854.462
2/17/2012 856.287

[TechMan]

I've also just verified the data I received from the provider with the BofA website, and you're right. My data are incorrect. This is the first time there's discrepancy like that on H0A0. I'm therefore correcting my comment, based on the correct data, that H0A0 has not started to roll over yet.

[BCB]

The all time high on this index WAS on Friday February 17 at 856.287. Below is a cut and paste of the data from the Bank of America/Merrill Lynch site on the Merrill Lynch High Yield Master II Index.

Hi Gary;
Is there a way to get this data, OTHER than being a client of BofA/ML???

I get this data from the FRED website, http://research.stlo...LHYH0A0HYM2TRIV but as I'm sure you're aware, it's about a half day late in it's daily updates...

Thanks,

Barry

[Gary Smith]

The all time high on this index WAS on Friday February 17 at 856.287. Below is a cut and paste of the data from the Bank of America/Merrill Lynch site on the Merrill Lynch High Yield Master II Index.

Hi Gary;
Is there a way to get this data, OTHER than being a client of BofA/ML???

I get this data from the FRED website, http://research.stlo...LHYH0A0HYM2TRIV but as I'm sure you're aware, it's about a half day late in it's daily updates...

Thanks,

Barry

Barry, the site has been having issues this weekend, but as it is now here's how to acess the info. In the link below, in the Index/Bond ID box type in h0a0 for the Merrill Lynch High Yield Master II Index. That's the numeral 0 not the letter o.
Then hit refresh icon for a chart up to two years or hit the view data icon for the ending prices. They update the prices around 11:30 to midnight each trading day. If you hit where it says home page you can obtain other data on the junk market from this site such as spreads between junk and Treasuries, junk yields, and more on the more than 2000 issues that make up this index.

http://www.mlindex.m...asp?sCurr=0|LOC

Edited by Gary Smith, 20 February 2012 - 03:01 PM.

[BCB]

FAN-tastic!!! Thank you so much, Gary.... I really appreciate it.... All I can say is THANK YOU for discussing this particular index in the past.... It's really made trading simpler (and EASIER) for me....and MUCH more profitable too.... It's one of several "tools", but it's a very, very good one!! Thanks again... Barry