JNK High-Yield Bond ETF Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended; Potential M Top

The tops are easy enough to call for the high-yield arena, JNK and HYG are the same chart technical-wise, but each time the Federal Reserve or its other crony global central banker friends are quick to step in and save the day. After 11 years, perhaps the jig is up.

Price comes up for a matching high but the indicators are weak and creating negative divergence. JNK may try to play around up here a couple days but it is ripe for a collapse. As long as the neggie d remains in place and the indicators do not move above the thin red lines shown in the right margin, the top is in. Price did not touch the middle band during the last down move so it needs to show respect at 107.75 and since it is a neggie d spankdown on the come, the lower band is in play as well at 105.

The RSI and stochastics are at or coming off overbot levels. The rising wedge is ominous. Price is extended requiring a mean reversion. The ADX was in a strong upward trend last year but not now. JNK and HYG are making new price highs but the ADX trend tool says the trend is weaker not stronger. The Aroon green line is overbot with nowhere to go but down while the red line is oversold, in fact at zero, with nowhere to go but up; both are bearish moving forward as a negative cross may occur. All these indications in this paragraph are negative and bearish.

The week is finishing up now but the volume will likely remain weaker than the selling volume last week. This should be the opposite for a bullish chart. JNK and HYG are topping out now and the historic thing about it is that this may be the true last hurrah. The monthly charts are in neggie d. They may try to squeeze out matching highs again in March or so, but the overall path forward for months and a few years is sideways to sideways down. The central banks are going to try and goose the stock markets again once the selloff occurs so it will be interesting to see what happens at that point in time.

If playing long in this high-yield arena, make a run for it now while the gittin' is good. JNK and HYG can be shorted from now through the remainder of the year. Keystone currently does not hold any position in these tickers. It would be better if the daily chart squeezed out a new price high a wee bit higher which would kick in the neggie d on that chart. The upper band in the weekly charts above have to be respected for next week. In other words, the top is in now, or it may occur next week, but we are likely right on top of it. So prices will top out anytime forward and this top is a multi-month and multi-year top for HYG and JNK. 

LQD corporate's are in the same boat but you see the long and strong MACD line on the monthly chart. LQD will fall in this near-term along with JNK and HYG but LQD will recover and come up for matching or slightly higher highs in price, say, in March-April, however, that will likely be LQD's long-term swan song.

MUB looks like its dragging around a load in its pants acting sluggishly. MUB will roll over in the near-term like the others and it is a toss-up if it can come back up. It will likely make a half-hearted attempt to rally, then roll over and die in the March-ish time frame. All four will retreat for a few weeks forward say into late this month early March and LQD is the only one that will come back up after that, but by March-April, all four tickers should be poison going forward through the remainder of the year. 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.