First off this is an updated chart. Here is the original chart I posted here on TV back on Jan 5, 2022
I typically hate wedges. They have a tendency to break one way and then reverse the other. Having said that The fundamentals right now compel me to post this chart as bearish.
People have this false idea in their heads that bond yields work like a light...
Junk Bonds have been artificially propped up by FED buying.
As inflation roars and the FED is way behind the curve, this key
area breaking is not what Zombie companies want to see.
Markets are in trouble. As I have been warning for months now.
CAUTION!
One of the more important charts out there.
The JNK etf shows the investor sentiment based on the interest in high-yield debt. Considering the expectation for the number of defaults to increase, the fact this is not selling off and the spread looking bottom could possibly be a confirmation of the strength in equities.
Will be interesting to see if JNK can...
AMEX:JNK is an ETF that tracks rated high-yield bonds or "junk bonds". These are the bonds rated Ba1 & BB+ by Moody's Investors Service, Inc., & Fitch Inc. respectively.
The bullish divergence with the ROC is pointing out that a bottom is near.
Bonds bottoming is a good sign for the market and breakout to the upside should confirm a healthy uptrend for...
Junk bonds to US Treasury 7-10 year bonds, a good proxy for risk on/risk off appetite and a good parallel to SPY action. Right now, we are due a risk off pullback, but the longer trend (Gann trend line and Ichimoku cloud) indicate a risk on environment will be soon to follow.
A relative comparison between the DJI, JNK & DJT is showing some underlying strength building in the market. This is also known as a "risk on" sentiment and that's when high risk assets do very well
Junk is one of my favorite indicators for risk assets. If junk confirms this reversal we should see a rally in stocks and crypto. Very early days. A few more weeks should show a confirmation.
It looks like the bond market is making lower lows, and China HSI as well. These are usually leading indicators telling us that risk on assets will also make lower lows.
But I believe the end is near, as you can see on the chart. This could also be a max pain fakeout as we are back testing the downtrend line. So starting to dollar cost average into some risk on...
JNK showed signs of breaking out this week but the long wick / shadow at the top of this weekly bar rejected off resistance an dumped the price back into the broadening descending wedge pattern.
This could either be an A-B-C wave with another major leg down coming, or an extension in the middle of a major wave down. Will be watching for topping signs around 94 with another major move down. Would expect stocks to follow along.
JNK/TLT explodes. In my opinion this only can be if no recession is seen in the near future.
It could also mean: TLT falls extremly fast because FED and Japan/China sell US T-Bonds at the same time in amounts which the market cannot handle at all.
The cracks in the system became obvious...
