Junk bonds are often viewed as leading indicators for stocks. Below looks at junk bond ETF JNK and the technical hurdles it faces.
When junk bonds turned weak in 2014, stocks struggled to move much higher.
And when junk bonds hit support and turned higher in February, stocks did the same.
Right now, JNK is testing a couple of breakout levels at (1) above.
For the broad market to keep heading higher, stock bulls want to see JNK breakout above its resistance tests above.
If this leader fails to breakout and turns weak, stocks will likely follow.