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The Power of the Pattern shared that Junk Bond ETF’s were creating bearish rising wedges on 5/24, suggesting a two-thirds chance junk bonds would fall in price. (see post here)
The above 2-pack reflects a breakdown in price and a breakout in yields for a Junk bond ETF and a preferred Dividend ETF. Both are nearing short-term support, where a bounce is due!
The key to the bigger puzzle on junk is the inset chart, reflecting that effective yields on Junk are breaking higher (bullish for yields/bearish for price) from a bullish falling wedge and rates are still very low on a historical basis!
Members are getting some key signals that are creating actionable ideas from our “Shoe Box” indicator and the high yield mutual fund complex. If you would like to know more about our Shoe box indicator that tends to give buy and sell signals send before major market tops and bottoms, click here and we will send you details on this great tool!