23 replies to this topic

[CHAx]

Leviathan:

I like your take on Gold, but I was a bit early. I posted this back in March and managed to get caught in that horrible short squeeze:

[Leviathan]

>>>>I am having a hard time getting much from the high yield market right now, either technically or transactionally. Corporate credit/project finance environment seems to be improving marginally, but that is about it. <<<<


Since the Fed announced they will begin buying Treasuries at their March meeting, junk bonds have been on a tear. Some of the open end funds haven't had one down day during that 19 day stretch. And since mid December junk bonds have been the stars with double digit gains, far surpassing the other indexes. On the other hand, the closed end junk bond funds (as opposed to the open end junk bond funds) aren't a very reliable tool for determing what is actually occuring in junkland and the junk bond ETFs aren't a whole lot better.

I dont follow bond funds. They often hold a lot of GSE debt, which isn't a good proxy for corporate (particularly now), bailed-out bank debt (which the FDIC is implicitly backing) and most dally in derivatives and credit index tranches. I think it is much more useful to look at who is raising debt, where it is being priced, and what individual issues are doing.

[Leviathan]

Leviathan:

I like your take on Gold, but I was a bit early. I posted this back in March and managed to get caught in that horrible short squeeze:

You have to keep the currency picture in mind. When they are printing fiat trillions and the dollar is getting wrecked vs rest of G7s you are going to have a hard time keeping gold down. That is why I think the stars are starting to align if you will. The printing presses and open market purchases have happened, dollar has retraced to reasonable support, and it is poised to rebound on investor risk aversion and repatriation as gold and other risk assets (particularly equities) deflate.

also, does this look like a bullish pattern?

[SemiBizz]

Attention Test Pilots: Please be advised per monthly charts that there is nothing going on bearish here until we at least break the March Highs... NAS 1587.00 SPX 832.98 ATC - Over and Out. No Further Inflight Advisories...

[Slothrop]

...which will take place Monday morning. That is all.

[no_mind]

Since the Fed announced they will begin buying Treasuries at their March meeting, junk bonds have been on a tear

On April 1st I bought some STHYX, hope I'm not too late to the party; junk is looking good, and I like the little bounce off the 50ma.

Best,
Tom
http://stockcharts.c...5543&r=7168.png

[Gary Smith]

Since the Fed announced they will begin buying Treasuries at their March meeting, junk bonds have been on a tear

On April 1st I bought some STHYX, hope I'm not too late to the party; junk is looking good, and I like the little bounce off the 50ma.

Best,
Tom
http://stockcharts.c...5543&r=7168.png

Good luck Tom. You already made almost 1 and 1/4% which is a lot for an open end junk bond in only two days and that doesn't include the nearly 9% annual yield which you accumulate daily and then paid to your account monthly. Junk is about the most trend persistent animal out there, and at least with the open ends without a whole heck of a lot of volatility. I'm 75% in junk now but don't stick around during the persistent downtrends, one of which we just recently had in February. There are but a few junk funds now that don't hit you with an early redemption fee and I use two of them.

[no_mind]

There are but a few junk funds now that don't hit you with an early redemption fee and I use two of them.

Gary,

Thanks so much for bringing that to my attention as the trading service I was using did not show redemption charges on the fees & expense page I was looking at, my bad for forgetting to ask if it had one. I can't find one that doesn't have one, may I ask the two you use that don't have have one? If not I understand.

Best,
Tom

[Gary Smith]

Tom, sent to your PM box.

[dcengr]

I just want to mention that in january of 09, some folks here were expressing their bullish views on junk bonds while I insisted it was in wave B. And within days, junk bonds went into a very quick correction that lasted until march. We've had a notable bounce in junk bonds, much longer than I expected, but not totally surprising considering the unprecedented government manipulation of the public regarding this. I will only say that I remain bearish on junk bonds and there's no way to know whether I will be right this time like the last time or the time at THE market top in oct 07 when I also predicted a massive correction in junk bonds (which too was timely). But I feel the bottom in junk is still far off. That's just this guy's opinion.