Posted by jhbernstein on 8th of Mar 2024 at 07:21 am
High Yield is ~95% of my business so I watch it very closely.
When it trends, it trends very well (11/1/23 - 12/31/23) but when
it doesn't, it's better to fade the range (all of 2024). One
important factor to look at is option adjusted spreads. The best HY
trend following trades happen as OAS compresses which shouldn't
happen if the economy weakens. (and I think your take on the
economy is correct) Take a look at this chart of HY OAS. I
see very little room for spreads to compress and a lot of room for
them to blow out.
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High Yield is ~95% of
HYG - interesting spot for the systems to go long. ...
Posted by jhbernstein on 8th of Mar 2024 at 07:21 am
High Yield is ~95% of my business so I watch it very closely. When it trends, it trends very well (11/1/23 - 12/31/23) but when it doesn't, it's better to fade the range (all of 2024). One important factor to look at is option adjusted spreads. The best HY trend following trades happen as OAS compresses which shouldn't happen if the economy weakens. (and I think your take on the economy is correct) Take a look at this chart of HY OAS. I see very little room for spreads to compress and a lot of room for them to blow out.