It’s been a while since we’ve had a post in this space, with the weekly analysis moved over to Seeking Alpha, but we have a technical development in the stock market that merits mention. It looks like we have a reversal this morning on the major indexes which, combined with extremely oversold conditions, gives us a decent probability of a stock rally.
There is a really long tailed hammer on the two most popular junk bond ETFs (HYG and JNK), which also is a positive signal for longs.
I am not calling a bottom here, just a bounce. The market will tell us whether it’s putting in a bottom in the course of time. A quick in/out long side trade may work out well. Some longer term bargain buying may also work.
Disclosure – we are long HYG in the income portfolio.