Credit Stress Panic? No, at least not yet!

11 Apr

Credit Stress Panic? No, at least not yet!

A friend shared a viral X post claiming we just saw the biggest exodus in the leveraged loan space — and they’re right on the numbers:

• $6.5 billion pulled from US leveraged-loan funds in just a week
• $1.4 billion from BKLN alone — the largest outflow in its 13-year history
• $9.6 billion also left high-yield bond funds — the most in nearly two decades

But here’s the thing... dollar flows can be misleading without context.

What is BKLN?
BKLN is the Invesco Senior Loan ETF. It tracks floating-rate loans made to riskier corporations — offering higher yields tied to interest rates. These are popular in rising-rate environments… until credit stress kicks in.

So what’s the chart saying?
Despite the outflows, price just bounced off a key historical support level: $20.31.

This zone has been tested before:
• 2018: Fed tightening – sharp but contained
• 2020: Covid crash – full panic
• 2022: Banking mini-crisis – 💥 and Bitcoin pumped from here 💰🟧…

Now in 2025, we’re seeing the biggest dollar outflow… but not the worst price action.

Perspective check:
The fund is much larger now. $1.4B today ≠ $1.4B in 2018. This move isn’t the apocalypse — not yet.

Final Takeaway:
If $20.31 holds, this may be just another macro shakeout.
Break that, and we enter “panic mode” — but we’re not there yet. (Thank God that Tradingview alerts exist. It's ON)

Watchlist:
• BKLN – key support zone
• HYG / JNK – junk bonds under pressure
• TLT – treasuries getting love
• BTC – does it act as safe haven again?

One Love,
The FXPROFESSOR 💙

14 Apr

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