JNK Forecast


Bullish Case: The JNK market shows a favorable short-term volatility increase, potentially indicating a bullish reversal. Historical returns suggest a greater chance of positive outcomes in the coming months, driven by upcoming earnings releases and broader market optimism.


Bearish Case: Implied volatility remains elevated, reflecting market uncertainty, with historical returns showing a persistent downside risk. The recent drop in institutional interest may signify a continuation of bearish sentiment amid economic uncertainties.


Potential Outcomes:

1) Continued low volatility regime (40%)

2) Moderate spike to $98 driven by positive market sentiment (30%)

3) Downturn below $92 due to unfavorable macroeconomic events (20%)

4) Significant rise to $100 if volatility exceeds expectations (10%).


Trading Oracle: Execute a bullish debit spread by purchasing JNK 01/17/2025 $95 calls and selling $96 calls. With a 40% upside potential targeting a quick profit from volatility spikes, this strategy harnesses the potential for positive price movement while minimizing risk.


July 25, 2024


SPDR Bloomberg Barclays High Yield Bond Forecast

JNK      SPDR Bloomberg Barclays High Yield Bond











Correlated Assets

Assets that tend to move strongly with JNK



BLK Forecast + Options Trading Strategies   BLK  Blackrock (0.93)


XLRE Forecast + Options Trading Strategies   XLRE  Real Estate Select Sector SPDR (0.9)


BND Forecast + Options Trading Strategies   BND  Vanguard Total Bond Market (0.89)


WAL Forecast + Options Trading Strategies   WAL  Western Alliance Bancorp (0.89)


HD Forecast + Options Trading Strategies   HD  Home Depot (0.88)



Uncorrelated Assets

Assets with little price relationship to JNK



ILMN Forecast + Options Trading Strategies   ILMN  Illumina (-0.0)


SOXX Forecast + Options Trading Strategies   SOXX  BTC iShares PHLX Semicond (-0.0)


AR Forecast + Options Trading Strategies   AR  Antero Resources (-0.0)


BYD Forecast + Options Trading Strategies   BYD  Boyd Gaming (0.0)


DINO Forecast + Options Trading Strategies   DINO  HF Sinclair (-0.01)



Anticorrelated Assets

Assets that tend to move strongly against JNK



RWM Forecast + Options Trading Strategies   RWM  ProShares Trust - ProShares Short Russell2000 (-0.83)


DXD Forecast + Options Trading Strategies   DXD  ProShares UltraShort Dow30 (-0.85)


SARK Forecast + Options Trading Strategies   SARK  Tuttle Capital Short Innovation (-0.87)


REK Forecast + Options Trading Strategies   REK  ProShares Short Real Estate (-0.92)


DRV Forecast + Options Trading Strategies   DRV  Direxion Daily Real Estate Bear 3X Shares (-0.92)





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