Stocks 'N' Bonds

A few things to watch in the coming week.

Despite today's pullback, my primary indicator remains bullish, so I'm buying the dip.

The SPX buy write is lagging the underlying index, so the bulls are looking good for now.

The spread between equities and bonds looks ready for a breakout, potentially to the upper Bollinger.

HYG, which I've been a big fan of since here, had an EXPLOSIVE day. Fixed income continues to provide stellar capital gains as investors scramble to grab yield in this 0% environment. Taking partial profits is probably a good idea, but such decisions are dependent on your trading time frame. 88 looks like MASSIVE resistance.

JNK is following in the footsteps of its higher quality brethren, so keep an eye on this lovely ETF.

The market has had a stellar run of late, and conditions continue to grow more bullish. Another day of pullback and consolidation would be healthy for the bulls, but I'll let the tape do the talking. I'm maintaining a conservative position size per trade, but it is growing as the volatility decreases.

Today's Twitterd Tickers $CTDC $SPY $SRS $TBT $USO

Here are the tickers making noise on StockTwits

CTDC is showing a basing pattern, and a high volume Bollinger break in an uptrend. This looks like something worth buying on dips, but it is currently over extended.

The SPY is showing encouraging stability and remains in an uptrend.

If the shit hits the fan, SRS will be a good place to get involved, just look at that volume! Real estate has not kept pace with the recent rally and may have more downside to come. This is a very speculative long, beware.

TBT continues to rip upwards on huge volume. This is proving to be a great, low volatility trade in a fundamentally sound direction. Great risk/reward in this one. I'm buying the dips, rips and whatever else the tape can give me.

Oil continues to make an impressive rebound, and though we may have a pullback, I suspect this is the real bottom. Clearly, it is too early to say with certainty, but I'm buying DXO intraday and DBC for longer term positions. The risk reward has been PHENOMENAL.

Today's action was great, even if the indexes ended up a tad red. Treasuries are still weakening which is giving a boost to oil and emerging markets. There is also excellent action in fixed income, but I'll provide those charts in the next post.

Portfolio Theory $DBC $EEM $IWN $IYR $PLW

A weekly look at the five most liquid but least correlated ETF's (excluding inverse's).

Last week's call made here is playing out rather well. DBC is in a great rally from it's lows, and has a volume pattern that often appears during bottoms.

EEM has bounced nicely, and looks poised to breakout. Expect bulls to come late to the party if it makes a new high.

IWN has finally broken it's downtrend, and has violated the upper Bollinger on increasing volume. Longs are sure to be interested next week.

IYR closed higher this week, but it continues to languish relative to other sectors. There are good fundamental reasons for this under performance, so there is little incentive to buy.

PLW got absolutely hammered this week, and you should probably buy TBT.

The weakness in Treasuries and strong bounce in oil suggests a major shift in market sentiment. If commodities can sustain a rally amidst increasing bond yields, the emerging market economies will be the greatest beneficiaries. As always, trade what you see and not what you think.