Why Follow Junk Bonds?

April 24, 2024

Mish's Daily

By Mish Schneider

Bonds issued by companies with a credit rating of BB or lower by S&P or Fitch, or Ba or lower by Moody's, are considered junk bonds.

Junk bonds, or high-yield bonds because the interest payments are higher than for the average corporate bond, pay high interest rates to entice investors to take on the greater risk of lending them money.

Doesn’t that sound like an excellent reason we use junk bonds as a reliable way to assess risk on or off?

5 Key Takeaways from this chart

  1. While HYG has yet to clear the January 6-month calendar range, it sits (for the 2nd time) just under the 6-month calendar range low.
  2. HYG held the 200-DMA and 75.50 which is now major support.
  3. HYG had a mean reversion in momentum and currently sits in alignment with price (above the 200-DMA)
  4. The July 6 month calendar range you see if you look to the left, is acting, along with the current 200-DMA, as support.
  5. Under 75.50 risk will turn to off. Currently risk is more neutral. And a move over 77.00 or the 50-DMA will change the scenario to risk on.


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Mish in the Media - All clips here

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Stockpick.app Partial-sign up for the app and hear the analysis every week 04-15-24

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CMC Markets Take a ride with Mish and she goes through commodities, indices and currencies and gives you a short-term game plan using long term bias 04-10-24

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April 25 FOREX Trader’s Summit Pre Market with Dale Pinkert

April 25 Malaysia radio

April 26 Live Coaching for MG members

April 30 Real Vision Daily Briefing

May 3 Benzinga Pre Market Prep

Weekly: Business First AM, CMC Markets, and new to us-stockpick.app


ETF Summary

S&P 500 (SPY) 500 now support

Russell 2000 (IWM) 200-202 resistance

Dow (DIA) 388 resistance

Nasdaq (QQQ) 430 resistance

Regional banks (KRE) 45-50 range

Semiconductors (SMH) 204 Support

Transportation (IYT) 67 pivotal

Biotechnology (IBB) 128 pivotal

Retail (XRT) 71.50 support 75 resistance

iShares iBoxx Hi Yd Cor Bond ETF (HYG) 76.50 support now

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