“When nothing seems to help, I go and look at a stonecutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred and first blow it will split in two, and I know it was not that last blow that did it, but all that had gone before.” – Jacob A. Riis

The aggressive squeeze continues in High Yield and it’s going to be key to see how this resolves for the next structural move across the board. As we have been discussing, our outlook on Junk and the broader markets has not changed in terms of a bigger picture view.

Once again, it’s all about the FED. The turn this has taken is simply > Hawkish FED = Pressure ON / Dovish FED = Pressure OFF. We will discuss this today and how it’s important to both trade the hand we are given but also understand the limitations of this simplistic view and how we think this is likely to resolve. The Quick-Take is: nimble and tactical on intraday opportunities but use the broader action to position swings.

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