Now that the FOMC is behind us,And the result was exactly what we expected-stay the course,And most sectors of the market found the obvious as a relief,And the metals rallied, right after I wrote that they would in the last Daily,And Jerome Powell said that most likely the next move won’t be a rate hike,And the Fed announced they will slow the decline of QT,And the idea of 2% inflation is on a back burner,And now we revisit Operation Twist,What are the junk bonds telling us?Junk bonds remain rangebound.But clearly, the bounce post-FOMC helped market confidence.However, regarding Chop in May rather than Sell in May (see Real Vision interview), HYG has more work to do as does the market.The chart shows that HYG still must contend with moving above the pivotal area of 76.50 and the January 6-month calendar range low.While HYG is holding the 200-day moving average, real motion shows that momentum remains below and in a bearish divergence.Yet, according to our Leadership indicator, HYG slightly outperforms the benchmark.We are happy with the green today.Nonetheless, chop and caution in most equities are still the themes as we begin May.More By This Author:When Silver Looks Bad, It’s Been A Sign Of A Bottom Can Semiconductors Pull Off Another Sustained Rally?Why Follow Junk Bonds?
