{"id":160511,"date":"2019-11-25T10:00:19","date_gmt":"2019-11-25T15:00:19","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=160511"},"modified":"2019-11-25T07:46:57","modified_gmt":"2019-11-25T12:46:57","slug":"consumer-discretionary-sector-and-corporate-bonds-on-verge-of-sell-off","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/11\/consumer-discretionary-sector-and-corporate-bonds-on-verge-of-sell-off\/","title":{"rendered":"Consumer Discretionary Sector and Corporate Bonds On Verge of Sell-off"},"content":{"rendered":"
November 25, 2019<\/div>
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By TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

I have been warning of a peak in the markets and a continued capital shift in the global economy that continued to push the NASDAQ and DOW towards new all-time highs while the foundations of the global markets continued to weaken.<\/p>\n

I authored dozens of research posts regarding this phenomenon over the past 90+ days.\u00a0 Yet the clearest signs of this event may already be present in these Consumer Discretionary Sector and Corporate Bonds charts.<\/p>\n

Consumers drive economic activity and corporate debt is often a measure of sustainable debt function within a functioning economy.\u00a0 When consumers tighten their belts and exit the economy in some form and Corporate debt is viewed as \u201cmore toxic\u201d than \u201copportunistic\u201d \u2013 something has changed in the global economy where a portion of the active consumer engagement of that economy is waning or has already left the building.<\/p>\n

One of the biggest reasons economic contractions happen is because consumers exit the marketplace as a form of protectionism.\u00a0 Much like in 2008-09, when the credit crisis started hitting, many consumers were in shock and simply exited the marketplace completely.\u00a0 They didn\u2019t buy big-ticket items.\u00a0 They didn\u2019t go on trips.\u00a0 They didn\u2019t do much of anything other than try to pay their bills and to protect what they had.\u00a0 I call this the \u201ctoilet paper and toothpaste mode\u201d.\u00a0 Consumers typically buy only what is needed at times like this and try to save as much as they can. You can get all of my trade ideas if you\u00a0opt-in to my free trend signals <\/strong>a<\/strong>l<\/strong>e<\/strong>r<\/strong>t<\/strong> l<\/strong>i<\/strong>s<\/strong>t<\/strong>.<\/strong><\/p>\n

Consumer Discretionary Sector \u2013 Daily Chart<\/h3>\n

If the Consumer Discretionary sector breaks below the $118 level and continues lower, it would be a very clear sign that the lower price channel has been broken and that new downward pricing pressures are taking place in the global markets.\u00a0 The bigger picture is that a breakdown in consumer confidence could take place \u2013 much like a self-fulfilling event.\u00a0 When the consumer market begins to tighten, more fragile consumers (those without extra money to spend) begin to tighten their spending and begin to default on loans\/credit cards.<\/p>

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As the event extends, more middle-ground consumers begin to change their tactics and risks become more evident to them.\u00a0 Each time a consumer sector moves into a protectionist mode, it pushes other areas of the economy into a crisis mode\/contraction.\u00a0 Thus, the self-fulfilling process continues until a bottom is reached.<\/p>\n

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High Yield Corporate Bonds \u2013 Daily Chart<\/h3>\n

Corporate Bonds are another measure of economic engagement and debt function.\u00a0 A breakdown in Corporate Bonds would become a major debt risk factor for the consumer market and for the global stock market.\u00a0 As Corporate debt falls below the lower trend line level, consumers and lenders may begin to view Corporate Debt as more and riskier.\u00a0 This creates a type of panic is the consumer sector has already begun to move towards a protectionist mode.<\/p>\n

Corporate Debt failures would represent a massive risk factor for the global economy because it would break the overall confidence within the markets and push consumers over the edge in terms of economic activity and engagement.<\/p>\n

Remember near the end of 2018 when the market collapsed after the US fed raised rates in early October 2018.\u00a0 This type of breakdown was the same type of event.\u00a0 What changed was the US Fed had to alter its longer-term stance in the markets and decrease rates in order for the markets to feel more comfortable.\u00a0 Now, 12 months later, after the FED has lowered rates three times and softened forward expectations, what would a breakdown in consumer and corporate sectors really do to the markets?\u00a0 What would the Fed use to counter a price contraction and consumer panic?<\/p>\n

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Pay very close attention to both of these sectors going forward.\u00a0 We believe we are very close to the edge of a massive price breakdown event given our research.\u00a0 If these charts break lower and breakthrough price support, the global markets could contract by at much as 15 to 22% over time \u2013 possibly further.<\/p>\n

I urge you visit my\u00a0Wealth Building Newsletter<\/strong>\u00a0and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar!<\/p>\n

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. This quick and simple to understand guide on trading with technical analysis will allow you to follow the markets closely and trade with it. Never be caught on the wrong\u00a0side\u00a0of the market again and suffer big losses. PDF guide:\u00a0Technical Trading Mastery<\/a><\/strong><\/p>\n

As a technical analysis and trader since 1997, I have been through a few bull\/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive\/life-changing if handled properly.<\/p>\n

Chris Vermeulen
\nTheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.\u00a0 It is provided for educational purposes only.\u00a0 Our research team produces these research articles to share information with our followers\/readers in an effort to try to keep you well informed.\u00a0 Visit our web site (TheTechnicalTraders.com<\/u><\/a><\/strong>) to learn how to take advantage of our members-only research and trading signals.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By TheTechnicalTraders.com I have been warning of a peak in the markets and a continued capital shift in the global economy that continued to push the NASDAQ and DOW towards new all-time highs while the foundations of the global markets continued to weaken. I authored dozens of research posts regarding this phenomenon over the past […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-160511","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/160511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=160511"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/160511\/revisions"}],"predecessor-version":[{"id":160514,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/160511\/revisions\/160514"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=160511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=160511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=160511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}