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The Effective yield on High yield bonds (Junk bonds) are at historical lows at this time. Over the past 6 years, when the yield broke above resistance of bullish falling wedges, the S&P 500 ended up declining between 17% & 50%.
Now the yield on junk bonds is breaking above resistance of a bullish falling wedge for the third time since 2007.
Should we listen to the message coming from the yield breakout? Will it be different this time?
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