Junk Bonds ETFs JNK and HYG both broke below their 50- and 200-EMA lines back in May and declined around 7% from high to lows. They are often considered leading of the stock market. Could it be important for them to climb back above these key moving averages?
You bet!
The Power of the Pattern reflected in the chart below that SPY was on support in this June-25 post . Both of them have experienced rallies of late off the late June-25 lows, SPY up 5.5% and JNK up 2.45%. A case could be made over the past two weeks that SPY is leading junk.
SPY and JNK have rallied off this support, with the Junk rally only about half the gains of SPY.
With junk bond yields breaking above the bullish falling wedge (top chart) it is important for junk bonds that they keep moving higher and move above these important moving averages, which they are now below.
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Junk Bonds Break Below Key Lines
Published 07/15/2013, 12:17 PM
Updated 07/09/2023, 06:31 AM
Junk Bonds Break Below Key Lines
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