by Chris Kimble
CLICK ON CHART TO ENLARGE
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!
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