Wednesday, March 11, 2009

Yield Spread

The Yield spread in the US along with REITs has blown out to all time highs.
With the government spending program in place, and the strong possibility that REITs are about to put in a multi month low, I have gone short long bonds and long US REITs.
I put the trade on yesterday with the chart looking as below.
Fortunately there was significant weakness in the bond market and strength in REITs so it looks like our timing might have been spot on.

(for some reason the legend says it is bonds vs SAPY- this is an error as it is vs US)