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HYG trade ideas

HYG/TLT: Short the ratioWe have an interesting pair trade here, you can take a short position in HYG, paired against a long in TLT to capture the profit from the spread closing. Right now, HYG moved too much, relative to TLT, so it's bound to correct back down, giving us a low risk trading opportunity. Position size should be enough to theoretically risk 0.5-1% of the account if price moves 3 times the daily ATR against you on each side (individually). You might have to hold a trade while it's in loss, but the combined profit/loss of the pair will result in a profit if the analysis is correct and this ratio starts to decline sharply. We pointed this trade out at the Key Hidden Levels chatroom today. For more information contact Tim West, or me. Cheers, Ivan Labrie.
AMEX:HYGShort
by IvanLabrie
2016 PANIC WAS SIMILAR TO 2009 IN U.S. JUNK As measured by the ratio between HYG (Junk Bonds) and TLT (US Government Bonds, 20 Year). HYG is now outperforming TLT by 14% from the extreme level as that seen in late 2008. Clearly the fears have outweighed the evidence for this disproportionate pricing of junk bonds. Back in 2008 we had financial firms closing their doors, Lehman, AIG, Bear Stearns, Banks were going under, the Gov't was taking over the banking system and spending $1Trillion to get the economy going again. Housing prices were plunging and home loans couldn't be made. Banks weren't making loans. Unemployment was surging to 10%+... And yet, compare that to 2015... nothing could be further from those events. Smooth sailing ahead!? Never. Fears relived are just as real as the first time. Tim 3/11/2016 11:25AM EST
AMEX:HYGLong
by timwest
9
High Yield in Trouble... AgainI want to start this year with a market I have been watching closely recently, and for good reason. The HYG, which is the most liquid high yield corporate bond exchange traded fund, has taken a beating over the past few months and looks ready to make another move lower. Not only is this trade attractive from a technical perspective, but the fundamentals are on our side as well given rates are poised to move higher this year. We can see on the hourly chart below that a breakout over 81 failed to materialize and we are now coming off of near term resistance on a pivot bar. Additionally the momentum indicators are showing more room for downward movement, while volume profile needs to be filled in to the downside. Based on the technicals, I would like to get short at current levels with a stop up at the bottom of the supply area at 80.68 and a target of 79.00 (3:1 r/r). I will give this trade no more than a week. @AKWAnalytics
AMEX:HYGShort
by AKWAnalytics
HYG (High Yield Corporate Bonds) set to outperform TLTUS Corporate Bonds (8-10Yrs) Vs US Treasury Bonds (20Yrs) Rising Ratio = Corporates Outperforming Treasuries BLUE BARS = THE S&P500 STOCK MARKET INDEX When Corporates underperform Treasuries and the ratio declines on this chart (black bars), USUALLY the stock market has gone down at the same time (NOTE THE BLUE BARS at the same time as the RED HIGHLIGHTED AREAS on the ratio chart). Treasuries in the last year have rocketed higher and is very likely from Central Banks both here in the US and around the world buying up US Treasuries (and the US Dollar). HYG looks poised to outperform TLT to the tune of 10%-30% over the next year. (Note: the MACD is a measure of the 12 and 26 week moving average. When the 12-week average is above the 26-week average, the "trend" can be considered "UP" and vice-versa. You can see the long trend down in the MACD that has now turned back UP, possibly signifying a change in "trend" from down to up.) Tim April 2, 2015 11:23AM EST 68.97 Ratio of (HYG*100/TLT). HYG is 90.48 +0.09, TLT is 131.21 -0.92 today
AMEX:HYGLong
by timwest
10
HYG Daily Trend Down since September with zero total returnTrend down since September 2014 for HYG US Junk Bonds are still Trending Down Means investors are taking Risk Off the Table Trend Down means a 2-month low in an indicator that measures the ease of movement in the market and it has stayed in a down trend position since then. The magnitude of the decline isn't that great here, as the trend turned down in September with HYG at a little over 91. It is only down to 87.40 as I type (and HYG has paid monthly dividends of roughly 40cents for 10 months now, so they are really at BREAKEVEN right here). Still, when risk taking earns you zero profits after 10 months, it certainly means there are no profits to distribute (and spend in the real economy) and boost the mood. If you aren't looking at HYG then start watching it. You can also watch JNK, another High Yield Corporate Bond ETF. Strategy: Sell short when CCI > +100 as in the other red boxes above. Cover some of the short position as CCI reaches -100. ] Tim 2:19PM EST Monday, August 3, 2015
AMEX:HYGShort
by timwest