$HYG High-Yield Corporate Debt pushing up against resistance from decade+ symmetrical triangle. A breakout here would send a strong signal about risk appetite in the markets.
For the last 18 months the HYG index corp debt market has been in a sideways pattern to which I wrote in great detail the over head fib relationship to which stopped the market in its tracks . But EVERY TIME IT MADE A LOW INTO THE 200 DAY AVG IT TURNED UP AS WELL AS ALL STOCK INDEX . THE CHART IS MY VIEW OF THE LABEL BASED ON MY FIB CYCLES AND MY WAVE...
... for a .95 ($95) credit.
Notes: She's gone quite aggressive here, selling the first out-of-the-money strike with a break even at 86.05. She'll look to roll for duration on extrinsic approaching zero to the first out-of-the-money short put for a credit or, at the very least, toward current price for a credit, looking to emulate HYG's annualized dividend...
Releasing this chart to see if the 1/3 of a triangle rule (timeframe) is accurate. Total triangle is 200 bars, while our bod is around 60 bars. We'll see.
The HYG has been one key reason the markets are where they are based on the buyback with cheap to free money. the news of the PUBLIC BEING ABLE TO NOW TRADE FOR FREE COMMISSION IS A SIGN THE STRONG HANDS ARE DUMPING STOCKS HELD FOR THE LAST YEAR AND MAYBE GOING BACK TO 2009 FROM STRONG HANDS TO WEAK HANDS AND TO BUY UP ON THE CHEAP IS A SAYING I LEARNED IN...
Historically has been a pretty reliable leading indicator.
Short Term Sentiment measures are at extremes, expecting a mild-moderate pullback to manifest in the next 2-10 days.
ETF Setup...
RSI <10.
Looking for Reversal to Mean Higher.
Taking 81/80.5 Put Credit Spread.
Also picked up 81.5 Call for Directional Bias Higher.
Oct Exp but aiming to Close in profit well before that...
Good Luck - Watch your $$$ RISK
HYG is hitting downward trend line resistance in a wedge pattern. It might be a good time to short. If the economy starts to break out inflation expectations should rise and all rates including high yield should rise. If the economy begins to tank, High yield bonds will be suspect and yields for junk bonds should rise as the likelihood of bankruptcy increases. If...
