If you want to know where risk on/risk off is at or in other words, liquidity/illiquidity is at, look at the junk bonds. In the backlink to JNK I provided the chart below.
The current snapshot below shows that reality has been tracking the model quite well. If this continues to follow the model them I would expect resistance at or slightly above the H+S neckline followed by a rapid downward rejection of the shares. We should see something soon here one way or the other.
Saturday, October 24, 2015
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