Junk Bonds Could Send New Bearish Message To Stock Markets
Chris Kimble | Sep 16, 2022 11:19AM ET
Junk bonds started sending a negative message to stocks last year, as SPDR® Bloomberg High Yield Bond ETF (NYSE:JNK) broke below its 30-week moving average.
Since falling below this important MA line, JNK has continued to decline, sending a risk-off message to stocks.
A small counter-trend rally took place, where it kissed the underside of its 38% retracement level, and the MA line, where a failed breakout took place.
JNK is now within 2% of its June lows, which currently comes into play as support. If this support breaks, it could send markets yet another bearish message.
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