If you’re still hanging onto high yield after the third largest weekly exodus in history (which was of course catalyzed by last week’s 10% plunge in crude prices), we would gently ask that you have a look at the following chart.
It would certainly appear as though there simply is nowhere else for this rally to go. That is, the last time spreads were this tight, oil was at roughly $90. So if you’re betting on further spread compression, our question is simply this: is it your opinion that if oil goes to say, $65 by some miracle, that HY is going to hit a 200-handle?
