The chart below shows the High-Yield Bond ETF (JNK) breaking below its March low with a sharp decline the last eight days. This is negative for stocks because junk bounds and stocks tend to move in the same direction. Notice that the Correlation Coefficient (JNK, $SPX) has been mostly positive the last six months.
Click this image for a live chart.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
Learn More
