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JNK [High Yield Bond ETF] Weekly Chart – 14-Period RSI Relative Strength Index Signals Bullish Divergence Forming in High Yield Market Prices have defined a downtrend throughout calendar 2018, reaching the lowest level to begin Q3 (not pictured) Momentum on the other hand may be signaling support for a near-term advance, as the RSI held a higher low, remaining above the 40 level for the past three weeks as of this writing. However, gains will likely be limited by resistance at the MA Line, currently running parallel to a long-term downtrend line at the 36.40 level. If prices manage to break above resistance, with a concurrent rise above 50 RSI, that would be a signal to remain long. Alternatively, lower RSI readings indicating weak momentum would further establish that level of resistance. Longer-term, it appears a symmetrical triangle pattern may be forming on the weekly chart, implying a continuation of the recent downtrend. The downside price target for a breakaway from this pattern is $33.70 representing a 5.5% drop from current levels, coincidentally equal to the annual yield of this market. JNK [High Yield Bond ETF] Weekly Chart – 50 Week Moving Average Moving Average Line Overlays Long-term Falling Resistance Throughout Calendar 2018 Downloaded from www.hvst.com by IP address 192.168.160.10 on 09/29/2021 [High Yield Bond ETF] Daily Chart – Trading Volume w/ 50-Day MA Prices Test 2018 Lows in July, Reverse Closing Higher by End of Holiday Week High Yield Corporate Bond prices rose throughout July (not pictured) meeting resistance for a second time in as many months at the 36 level. As of this writing, this index is virtually unchanged from its Q1 closing level. Finding support and gaining momentum in recent weeks, it appears that the High Yield market has stabilized, for the immediate time being. It remains to be seen however, which will have a greater impact on price action moving forward: Interest Rate Environment vs Equity Market Beta. At current levels, a long position could be justified for income generation. Although, as previously mentioned the potential for price appreciation appears limited to 1-2%. Stop placement may be considered at or below the $35.5 level on a closing basis. Additionally, intermarket analysis of both U.S. Treasury Bond & Stock markets is likely to assist in the anticipation of future direction of High Yield prices [and rates] relative to the S&P 500 dividend or Risk-free Treasury Rates. JNK [High Yield Bond ETF] Hourly Chart – OHLC High Yield Finishes Q2 at Lowest Level, Gap Down in Following Session Prints 2018 Low Downloaded from www.hvst.com by IP address 192.168.160.10 on 09/29/2021.

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