HYG High Yield Bond ETF Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended; Significant Top At Hand

Credit risk is being mis-priced greatly in markets. In recent years, you have watched how Keystone calls the tops in HYG and JNK but the pullbacks were short-lived due to central banker largess. The Federal Reserve and other partners in crime such as the BOJ, ECB and PBOC, stepped-in to save the global stock markets at the start of this year and the chart shows the orgy spike higher on the central banker rocket fuel.

Note the tight standard deviation bands to begin this year. That move was headed down into Hades and was only saved by the global central banks acting in collusion. Well, they held the bears off at the door this year but HYG has violated the upper band. The middle band at 82, and rising is on the table, also the lower band at 76, and rising.

Price is extended above its moving averages requiring a mean reversion lower. The red lines show negative divergence in play wanting to spank price lower in the long-term monthly basis. The RSI is trying to squeze out one more month of buoyancy but the tape is getting very heavy. HYG may want to come down into that high trading volume area at 76-82 to see which side wins going forward.

The red rising wedge is ominous since the collapses from rising wedges can be quite dramatic. If you are sticking around in HYG and JNK going forward, you sir, or madam, are a fool. The ADX is down at 14 showing that the rally higher is NOT a strong trend higher. The Aroon green line is pegged at one hundo with nowhere to go but down which is bearish.

The high-yield space is about to have a religious experience. HYG and JNK will drop on a monthly basis going forward so if you are long you had better sell and git while the gittin' is good. LQD is in the same negative boat going forward but may take an extra few weeks to top out.  MUB is also setting up bearishly and will be last to roll over lower. Keystone is not playing these tickers now but will look for short entries. HYG and JNK are topping out right now and great shorts from today forward. 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.