Insanity

I've recently profiled the rush out of junk bonds relative to treasuries and it's amazing how aggressively the junk bonds have come back.

Folks have been violently bearish and sentiment has driven this sharp rally back to the highs.  Need proof sentiment is violently bearish?

Traders are paying insane fees to short junk bonds.  Yes, the demand to short HYG was so great you had to pay over 300k a day to get short at the bottom.  No wonder it's just ripped!

It's hard to be outright bearish junk bonds with that occuring.  Those market forces could just keep ripping it higher especially as we get all beared up on any down turn

On a relative basis we still haven't seen a higher high in the HYG to LQD ratio.  Until that changes it's pointless to write off the red flag this is flashing.  Maybe it will soon.  

Trade 'em well