Junk Bonds are often viewed as leading indicators for the stock market. Rising junk prices are usually greeted by stocks in a positive way and weak junk prices are often viewed in a concerning way.

Below looks at popular Junk Bond ETF (JNK)



JNK faced a triple breakout test at (1) a few weeks ago, with momentum at very lofty levels. Since hitting the breakout test, JNK has been a little weak.

JNK is now testing rising support, of a potential bearish rising wedge at (2). Risk On trade in stocks would like to see a breakout at (1).

If JNK breaks support at (2) and turns weak, historically stocks have struggled making large upside gains.

Humbly seems that Junk is at an important price zone!




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