Is The Market Now Topping? Here's My Tell.
In my last post, I noted that JNK, the SPDR High Yield bond index ETF, was dropping while the S&P 500 was continuing upward. Since JNK and SPY have a high correlation (they tend to move in the same direction), something was due to give. Either SPY was due a selloff, or the correction in JNK was done and it would soon follow SPY up.
As shown in the chart below SPY, (the red and green candle chart) has moved on to new highs since the downturn started in JNK (shown by the vertical white line). SPY did pause a bit to digest the sequester non-event, but it didn’t even drop to its support level, shown by the longer up sloping white line. And, in fact, JNK did resume a modest uptrend:
- Up on bad news
- Up on good news
- Down on good news
- Down on bad news
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