Divergence Between HYG and DOW Presents A DOW Short Opportunity

The breakdown in HYG even as the DOW is making new highs suggests a divergence that can only be reconciled with a correction in the DOW. Note the extremely high volume in the down days for HYG, which serves as a confirmation on the downside. If the FED really does raise the Fed Funds Rate in December (which I think to be unlikely), we will see another steep decline in the DOW ala Jan 2016. In the past week, the emerging markets (use of SCHE as a proxy in orange) are showing signs of distress with the threat of a FED hike looming and a stronger USD. If this continues, the DOW will not be able to escape the pull of gravity.