LQD Investment-Grade Corporate Bonds Weekly and Daily Charts Downward-Sloping Channel

LQD is the leader for the roll over as compared to HYG and JNK. A triple top was placed in October-December. Money was moving around late last year with the worry over taxes and other investing matters leading to choppy sideways action. Price is now testing the bottom rail of the downward-sloping channel at 120.  The move off the top occurred due to the negative divergence smack down (red lines). Price is at matching lows compared to mid-December and note the upward-sloping indicators (thin green lines). This encourages a bounce, however, the RSI is weak and bleak (short red line) and prices typically will test lower in this situation. Therefore, once price trails a bit lower watch to see if the positive divergence remains in place, or not. If the RSI drops below the December low, price will venture lower over time as well.

The weekly chart shows the red rising wedge, overbot conditions and negative divergence that created the Fall spank down. Price is stumbling sideways. The blue rectangles show distribution taking place with large selling volume occurring the week after an upward move occurs. This is Joe Sixpack running into LQD, and corporate's in general, since most everyone on television tells him so, and the institutions and large funds are all too happy to provide the shares to the bag holder. The weekly chart is weak and bleak across all indicators. There is no hint of positive divergence whatsoever indicating a continued path lower for LQD moving forward. LQD rolled over first. HYG should roll over next then followed by JNK after that. The air is coming out of the Corporate Bond Bubble. LQD is moving very orderly to the downside so far. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.