HYG High-Yield Corporate Bonds Weekly Chart Overbot Rising Wedges Negative Divergence

High-yield corporate bonds weekly chart shows a strong rising wedge in place. The red lines show negative divergence that wants to see a spank down now. In the shorter term time frame, however, the short green lines show some desired long and strong action is still needed. Thus, after a spank down, price will want to come back up for another look at these highs. When price comes back up, watch the broad-based rising wedge's top rail, price may tuck itself there before negative divergence will show leading to more extensive downside moving forward.

High-yield is a crowded trade now and in the event of market turmoil, the slightly tighter liquidity, as compared to other asset classes, will spank it down harder. The regular Ma and Pa traders need to tread softly since the traders that rode the easy money rally from November-December are looking for bag-holders to come along, and Ma and Pa are getting caught up in all the high-yield hype. Every top needs a bigger fool and the search is currently ongoing for these fools. Projection is a 92.20 top with prices moving sideways to sideways lower form there the remainder of the year; although once QE3 hits we will have to reassess. This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.