Bill Gross: High Yield Corporate Bonds Overvalued, Watch HYG JNK Rising Wedge + Credit Spreads (IEF, LQD, HYG) If Re-Pricing Of Risk Occurs

This market and low volatility is making Dvol repeat posts because nothing is moving. This post is about high yield corporate bonds, continued from:

HYG, High Yield Bonds Selling Off With Risk, Leveraged Loan Index Testing '08 Resistance. Does Someones Yield Have To Give? (Blog post: 10/28/2009)

Bill Gross (largest bond fund manager in the world?) has been on the scene lately talking about high yield debt and risk in general.

Bill Gross Says Value Diminishing in Credit Markets (Bloomberg: 11/13/2009) 
Bill Gross: Six-Month Rally in Risk Assets at Pinnacle -Investment Outlook November 2009 (Midnight Candles) (Blog post: 11/2/2009)

After reading Gross's comments and looking at the charts of HYG and JNK (high yield corporate bond ETFs from iShares and SPDR series) there appears to be an inflection point building via a rising wedge.  Meaning bulls need a speed injection to get over the hump (administered free of charge by you know who).  I provided charts of $HYG and $JNK as well as a live $HYG chart.  Most recent yields based on distribution are:  HYG 9.77%, LQD 5.45%, 10Y Treasury 3.43%.  ALSO look below at the performance spread between HYG, LQD and IEF.

JNK (Courtesy of Stockcharts.com)

HYG (Courtesy of Stockcharts.com)

Here is the performance gap between HYG (HY), LQD (IG) and IEF (7-10y Treasuries). From late March 2009 or past 8 months, HYG is up 35%, LQD up 17% and IEF down 3.3%.  Will this gap close?

IEF, LQD, HYG (Courtesy of Stockcharts.com)