HYG High-Yield Weekly Chart Negative Divergence

Chairman Bernanke and future Chair Yellen do not see asset bubbles. They may want to check the tint on those rose-colored glasses. High-yield is at a lofty level and will likely hurt folks moving forward. The prior top this year was called with the rising wedge, overbot conditions and negative divergence, and it occurred, but through the year, courtesy of the Fed's money machine, HYG makes a comeback to new highs once again. The power of the central banker intervention is astounding. The Fed is the market. The RSI in April was not entirely convinced that the complete end for price had occurred, and sure enough, price comes up for another look at the highs. Note the lack of enthusiasm with the RSI now. So HYG is up near +40% off the 68 low 2 years ago.

The red lines show the negative divergence in place across the board with a new rising wedge in place. Stochastics are overbot. The money flow wants to squeeze out a bit more to the upside, and the RSI is not overbot, so a continued oscillation inside the apex of the wedge is a reasonable expectation for a week or three but the projection is sideways to sideways lower for the weeks and months ahead. 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.