Courtesy of Chris Kimble.
Junk bonds are considered to have an influence on stock prices or a leading indicator.
If either case is true, what Junk is doing this month, might be worth paying attention too!
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Junk Bond ETF (JNK) has been pushing higher since earlier this year. The rally now has them facing falling resistance as well as its 50% retracement level, of the decline junk suffered from 2014 until it created back to back monthly reversal patterns (bullish wicks) in January and February at (1). The monthly bullish wicks at (1), were followed by a rally in junk and the broad markets.
One months pattern at (2) DOES NOT prove anything for the bulls or bears.
Humbly feel the risk on trade might want to keep a close eye on junk going forward, due to the shape of the pattern this month and where it is taking place. Junk could end up sending an important message for the future, this month!
Wishing You and Yours a Safe and Happy Halloween
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