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Chart of the Week – Intermarket Relationships

Asbury Research

Contributor:
Asbury Research
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By:

CMT Chief Market Strategist

SPDR Bloomberg Barclays High Yield Bond ETF (JNK)

INTERMEDIATE TERM BULLISH, MAJOR DECISION POINT 

The chart below highlights JNK’s Dec 12th resumption of its larger 2019 advance, which targets an additional 1% rise to 111.50. However, the validity of this breakout is now being tested as JNK has collapsed back to the breakout point at 108.77. 

A sustained decline below 108.77 would negate the bullish implications of the chart and suggest a significant top is in place at the recent highs.  We are particularly interested in JNK because of its statistically significant and stable 10-year positive correlation to the S&P 500.

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