What is going on with Junk Bonds?
Ok, so the chart is Year To Date because I wanted to emphasis the magnitude of the decline, however the two year chart below demonstrates that the violation of the 200 day moving average is a significant event.
Last time HYG violated the 200 day moving average was during the "Flash Crash".
Couple things I want to keep in mind in deciding whether this is an opportunity or a trap:
The domestic economy will continue to slow for the next couple of years with consolidation of the municipal sector. Exports will remain strong as the dollar continues to fall. At some point in time, the export economy will have grown and the government sector contracted to a point of equilibrium and economic stability will be achieved.
I am not feeling greedy at the moment so it is not quite an opportunity yet, but I will be keeping my eyes on this one.
Posted by Bradley Fluetsch at 6/14/2011 4:59 AM 
Categories: Adding Value
Tags: yield interest bonds high junk HYG stock economy profit opportunity
Categories: Adding Value
Tags: yield interest bonds high junk HYG stock economy profit opportunity
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