Several risk on indicators surged higher into year-end, such as small-cap stocks and junk bonds.And as we typically see, this coincided with a big year-end stock market rally.Today, we take a look at the Junk Bonds ETF () to see if this is sustainable into Q1 of 2024.Above is a weekly chart of the JNK. As you can see, the Junk Bonds ETF has tested the Q1 2023 highs (resistance) for the past three weeks at (1). $JNK is also testing this important price level while its RSI is the highest in a few years at (2).To sum it up, junk bonds are overbought and testing price resistance… and starting to slip a bit. Stock market bulls hope JNK doesn’t continue lower. (Click on image to enlarge)
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Are Junk Bonds Starting To Weaken? Stock Bulls Hope Not
