HYG High-Yield Bond ETF Weekly Chart; Overbot; Rising Wedge; Negative Divergence

The HYG high-yield corporate bond ETF is topped-out with a double-top, just like LQD, like JNK, and like the S&P 500. MUB, the muni's, may want to jog for a couple weeks (down for a week, then back up the next week to top out) so traders and investors are perhaps buying MUB preferentially for perceived safety.

The HYG chart walked into an ugly forest and bumped into every tree. It topped out as October started due to the negative divergence (red lines), overbot conditions, rising wedge, upper band violation and overextended price above the moving average ribbon. All negatives so slap, HYG receives the neggie d spankdown that should begin a multi-week slide.

However, there is lots of happy talk nowadays from King Donnie and Pope Powell professing happy tariff deals, that do not materialize into concrete contracts, rate cuts for as far as the eye can see, more money-printing and easy money conditions so the wealthy can protect their stock holdings, etc... You know, the ongoing crony capitalism filth gig.

So HYG price recovers and once again bumps its head on that strong 80-81 resistance. Since price is printing matching or higher highs, the chart indicators can be assessed for neggie d and now it appears in spades. There is no mistaking the neggie d across all chart indicators. This puppy is going to trail lower for many weeks ahead.

The ADX shows 2024 as one big party verifying the strong trend higher well into this year (pink box). Alas, the ADX continues lower since the strong trend was lost in May. Price moving higher or maintaining elevated values as the strong trend is lost is not good. Note that for price coming back up to make the matching high, the ADX roll over lower, not a good look. Despite price at joyful heights with everyone partying like its 1999, a la Prince, the ADX no longer considers the rally to be a strong trend.

The Aroon shows what many charts show nowadays as the major and historic topping action continues. The green line shows that nearly all the bulls believe that HYG price will go up forever. Comically, the red line shows that every single bear believes that HYG will go up forever. That is funny stuff just like other charts. And people parade across television and internet screens saying there is no sign of euphoria, or complacency, in the stock market. Open your eyes. Everyone bullish remains off the charts bullish and all the bears have left town. The handful of bears remaining expect prices to continue higher forever, so they are converting to bulls. That is a boat fully loaded to the bull side as the tide rolls in.

The orange lines show areas of price support on the way down. The orange circle shows a gap that is 'big enough to drive a truck through', so you have to use this worn-out cliche if you can, and that gap will need filled in the future.

On the HYG monthly chart, it is either topping out right now with the weekly or may want a jog move of down one month, in sync with the weekly basis moving lower for a few weeks, and then back up for a month that would be THE very long term top. You will know this answer in the charts in a couple weeks.

There is a high likelihood that THE top is now and it will last not only many weeks, but many months if not a couple years or more going forward. Keystone is not in HYG long or short right now but the obvious play is short going forward. If you are in HYG, take the money and exit stage right. If you are a bull, or a bear, it does not matter now since everyone expects higher prices, and believe that HYG will continue going up forever, you need to begin to gird your loins. Little Lion Man. It is a good thing Mumford did not call it Little Loin Man. 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 10/30/25: HYG is at 80.80 continuing to chop sideways. The 20-day MA support is 80.75 so it is time to bounce, or die. The 50-day MA is 80.60 so that would be big trouble if it fails.