JNK: Junk Has Never Smelled So Good.. Really ??

With the backdrop of economic expansion, loose monetary policies and positive sentiment among investors, huge amounts of money flowed into corporate bonds.
To be exact, high yield "Junk" corporate bonds.

The EXIT door might be too small for these investors if there is a mad rush for the exits.

Prices have completed a textbook a-b-c retracement since its low in 02/2016.
The final c wave has evolved in the form of an Ending Diagonal .

The initial down wave has completed and is in the final phases of upward retracement.
A strong and incisive break down from current price will confirm the completion of the retracement.

A break above micro wave ((5)) at $37.46 could hint that the Ending Diagonal is not complete or other patterns are forming.

Comment: Watch for a break of this immediate support for downside momentum.
Comment: Critical Resistance
Comment: This critical resistance needs to hold any upside retracement to maintain current bearish stance.
Comment: Prices gapped down through the short term support around $37.15.
This support has now turned into short term resistance.
Any upside retracement should terminate below this resistance to start the next down leg.
Below average upside volume paired with above average downside volume is making the outlook for JNK ominous.
Comment: JNK has turned higher in recent days since breaking down from its Oct 2017 high.
Critical resistance remains at its most recent high.

A failure to test or break this critical resistance will have bearish implications for JNK in a forceful manner.

On the contrary, a break above critical resistance will imply a delayed but inevitable break down of junk bonds in the not too far future.

Comment: Prices have not fallen as fast as anticipated.
A big move could be in the making.
Watch for a strong break down from nearby price range.
The bias is still firmly to the downside till a break of the critical resistance.

Comment: Prices completed a textbook A-B-C retracement by breaking down from its uptrending channel in increasing above average volume.
Any retracement should find resistance from the underside of the channel.
Comment: Prices appear to be starting to accelerate to the downside.
Downside momentum should pick up in the coming weeks.
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