If SPY touches the 200dma Nov 4-7, it’s a buy. October is a ‘down’ month. As long as cpi <2.0, a ‘down’ month (Oct) is followed by an ‘up’ month (Nov).

Once ccpi 2.0 is achieved, the break will be great see below:

http://finance.yahoo.com/news/blackstone-were-epic-credit-bubble-144901589.html

Blackstone: We’re in an ‘epic credit bubble’

The high valuation of many companies today makes it harder for them to grow. “The biggest risk to returns of this vintage is that exit multiples are depressed,” Baratta said.

“We are in the middle of an epic credit bubble, in my opinion, the likes of which I haven’t seen in my career in private equity,” Joseph Baratta, The Blackstone Group (BX)’s global head of private equity, said Thursday night at the Dow Jones Private Equity Analyst Conference in New York City. “The cost of a high yield bond on an absolute coupon basis is as low as it’s ever been.”

My comments:

This is good news as the Fed will have to ‘twist’ shortly after tapering next year!  As the yield spread between gov’t and junk bonds widens, twist will cushion the rise in corporate interest rates.