HYG High Yield Corporate Bond ETF Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

Here we go again. Keystone has called the major, and minor, tops in HYG and here we are, it's Groundhog Day again. Bigger roll-over's are always expected from the tops but instead the Federal Reserve is always quick to step in and save the day to protect America's wealthy class. And so, here we are again, at another top.

The RSI and stochastics are overbot and agreeable to a pullback. The red rising wedge is ominous since the collapses from this pattern can be quite dramatic and bloody. The red lines show universal negative divergence across all indicators. The green lines show a sliver of energy left in the MACD line so this may create a jog move where HYG drops for a month, then floats higher to match these highs again, then roll over and die. However, note that the MACD line remains neggie d across the 7-year time period so this negative force can slap price down at anytime, and considering the neggie d for all other indicators, the bears are about to growl.

It is interesting that halfway thru last year when a little pullback occurred, HYG has moved higher but on lower volume. Then, from the selling month of October when the Fed pump began, the higher highs in HYG come on lower volume.

The blue line shows the bottom of the Q4 2018 market crash and collapse. That is when the Fed panicked on 1/3/19 and started pumping money like a madman reversing the rate-hike path announced only a couple weeks prior. That tells you that all the pricing above that blue line is phony-baloney only there because of the global central banker liquidity.

The brown line shows the May 2015 top in markets; it can be viewed as the last legitimate top, and it is even pumped up with central banker largess from 2009 thru 2015. You can see the Tweezer Bottom in early 2016 that saved the financial markets. Yes, it was the Fed riding in on the dovish white horse to save the day, and they did. It is easy to realize that all that price action above the brown line is phony-baloney fake garbage. Just, think, the day of reckoning will appear in our futures.

The purple ADX box shows that the rally higher from the first money pump from Helicopter Ben in March 2009 thru 2014 was a very strong trend higher. However, that strong trend was lost in early 2015 and the party was over. The Fed saved the day with the Tweezer Bottom in early 2016. The second purple ADX box is actually telling you that the collapse in stocks from May 2015 into early 2016 was the real deal, it was ovah, as they say in Brooklyn. But the central banks are powerful and the money pump that started early 2016 sends equities ever higher. The wealthy dance with glee.

The ADX was showing that the collapse was real and a very strong trend lower but that trend petered out when the stimulus and money printing began in 2016. The Aroon then produces the positive green circle cross and HYG heads higher as traders carry the central bankers on their shoulders in adoration. The Aroon green line is pegged at the ceiling with nowhere to go but down which is bearish. The ADX is down at 16 which is ridiculous because the with the new highs it should be up at 25, or 30 or higher. It tells you that despite the nose-bleed levels, the rally is not a strong trend higher.

HYG is topping out now and will roll-over. Plan accordingly. This is a long-term top on a multi-month and multi-year basis so do not look for the joy to return anytime soon. It would not be unreasonable to see HYG at 75-80 later this year. Perhaps investors will be praying that it is only back to that level and not 70. Keystone does not hold HYG but would only play it short. HYG looks ripe to roll over going forward.

JNK is the same chart and technical analysis as HYG so it will top out now as well. LQD has a jog move left in it on a monthly basis so it will not top out until Feb-March. MUB is sick right now like HYG and JNK so these three can be shorted now and then short LQD from about February-March 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.

Note Added 9:45 AM EST: HYG 88.19.

Note Added Friday Morning, 1/10/20, at 4:51 AM EST: HYG finishes yesterday at 88.36. The record high print occurs with universal neggie d on the daily chart. The jobs report may impact markets but HYG is set to pull back going forward. HYG may top-out today. The inflows into US high-grade bond funds and junk funds hit record levels. The party is in full swing. Whoopie. Wheeee. The momentum is to the upside but things are frothy. We are at the top of the mountain.

Note Added Tuesday Morning, 1/14/20, at 8:13 AM EST: HYG is at 88.39 printing a record intraday high at 88.45. The view is spectacular from here. Look at that. We can see the Eccles Building.