HYG High-Yield Corporate Bonds Weekly and Daily Charts Overbot Rising Wedge Negative Divergence High-Yield Bubble Grows Larger

HYG was last highlighted about a year ago as the chart formed the blue rising wedge and negative divergence which created the spank down in April 2012. Note the doji candlestick that marked the top. After that pull back, the spigots were opened to save the day with all the phoney baloney central banker money. In a coordinated move, Draghi pledged support for the euro in late July 2012, following that up with the OMT Bond-Buying plan. Chairman Bernanke chimed in with QE3 Infinity, and then QE4 Infinity and Beyond in December 2012. The easy money is fueling the current dividend and high-yield bubbles.

The weekly and daily charts are set up with overbot conditions, rising wedges, and negative divergence across all indicators. Time for a spank down. The money flow on the daily chart shows a hair more momo but overall, lower prices are expected moving forward, perhaps for the considerable future. The drops out of the rising wedges can be quite dramatic.  The daily chart shows the gap up to begin the year, folks wasted no time in chasing yield wherever they can find it. This thirst for yields is creating the divvy and high-yield bubbles that are now topping and ready to pop. The gap up creates an island where price remains so a potential island reversal is in play where price would drop to 94, then collapse thru the gap in a heartbeat to print 93.4 and lower. The alternate is for price to simply drop to fill the gap. A potential H&S pattern may form as price rolls over from the top. Projection is for a peak in prices right now, the high-yield and dividend stock bubbles are topping and popping. Q1 will be very exciting and the current price levels may not be revisited for months or years once the roll over occurs. 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.