High Yield Perking Up:
As financials are still the worst-performing major S&P sector over the last one-month period, even acting worse than the cratering energy group, there are some very small green shoots. There are some better-looking candles currently, and remember these give you a good risk/reward entry as opposed to just blindly trying to catch proverbial falling knives. The XLF recorded a bullish engulfing candle Thursday after a spinning top candle the day before. Even the hardest hit KRE has not yet undercut the long-legged doji candle it registered on Monday. The IAK has a nice Thursday, although it did fill in an upside gap from Tuesday’s session. Below is the chart of the JNK, which many market participants like to gauge “risk on” behavior with and it is ever so slowly breaking ABOVE a bearish head and shoulders pattern. Its 200-day SMA is sloping higher and has been support twice since the 6% haircut made from the bearish island reversal from 2/2.