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4 Key Market Charts to Watch in Early 2014

Here's a great way to guage the market's risk during 2014

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3) Credit Weakness: U.S. Credit has been a bastion of strength since the lows in June 2012. The weekly chart below compares the High Yield Credit ETF (HYG) to a 7-10 year Treasury ETF (IEF). The ratio is currently at new highs, indicating the outperformance of High Yield credit which tends to be a favorable backdrop for U.S. equities. You’ll notice that the ratio started declining in early 2011, well in advance of the 21% correction in the S&P 500 that year.

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