Below looks at the popular junk-bond ETF, JNK over the past decade.
Junk bonds represent so-called “weak bonds” in the States. Many keep a close eye on junk bonds for insight into where the broad stock market is headed.
Today, JNK remains inside multi-year falling channel (1). JNK has diverged against the overall rising stock-market trend since mid 2014, when it hit the top of falling channel (1).
Since the 2014 high, JNK has created a series of lower highs and lower lows. At this point, JNK is testing the top of the blue-shaded falling channel and two other resistance lines at (2).
It doesn’t matter until it matters is in play at (2).