Tag Archives: high yield bonds

In this article I don't predict a hard date or magnitude of the next market crash but merely point out that there are several catalysts that could easily lead to a large market crash in 2016.

Even though the fact that we are in the midst of an absolutely insane financial bubble should be glaringly obvious to anyone with half a brain, the above referred to skeptics have convinced themselves that the current state of affairs can persist indefinitely. Sadly, it looks like what is about to hit us in 2015 is going to serve as a very rude wake up call for them and for the millions of other Americans that currently have their heads in the sand.

There’s no fear anymore - anywhere - and I’m talking about the type of fear that overwhelms investors – and, in turn, the market. The surest indication of this can be found in the following chart.

Over the past 6 years, when the yield on high yield bonds (junk bonds) broke above resistance of bullish falling wedges, the S&P 500 ended up declining between 17% & 50%. Will it be different this time?