Junk Bonds at important inflection point, should impact stocks!

junk in trunk pic july

Junk bonds have been quality at sending Risk On and Risk Off message to the broad stock market. Below looks at Junk Bond ETF JNK over the past decade.

JNK finds itself at an important price point below and what it does in the upcoming couple of weeks could become a big influence on the Risk On/Risk Off trade.

jnk testing dual resistance july 26


JNK peaked in 2014 and after doing so and turning weak, the broad market didn’t move much higher. JNK hit falling channel support in February of this year and the Risk On trade hit a low at the same time.

Now JNK is testing the top of its 3-year falling channel as well as its 50% Fibonacci retracement level at (1 ).  If JNK can breakout, the Risk On trade would like that.

If JNK would happen to breakdown at (2), it would get the attention of the Risk Off trade.

With weekly momentum now entering into the lofty range (top of chart above), what JNK does at (1), becomes pretty important.


Silver; Dangerous price point to slip from

slipping pic

Below looks at a chart of Silver prices over the past 8-years. After declining sharply, Silver hit its 38% Fibonacci retracement level twice at (1). After failing to break above Fibonacci retracement resistance, selling pressure picked up and Silver fell hard.

silver testing 23 fib level slip risk july 25


Silver is now testing its 23% Fibonacci retracement level and falling resistance at (2), inside of a short-term rising wedge pattern.

Silver is testing short-term rising support at (3), just under Fibonacci 23% level.

It could be important for Silver to NOT slip below support at (3), just below a key retracement level at (2).


Doc Copper going to peak again at 200 Day moving ave?

mountain peak

Doc Copper is often viewed as a leading indicator, for global growth or lack of.

The 200 day moving average is often viewed as the line in the sand to determine if an asset is in an up or down trend.

Is Doc Copper climbing above its 200 day moving average a good or bad sign?

Below looks at Doc Copper over the past decade with the 200 MA applied.

copper 200 day moving ave peak july 21


Copper peaked in 2011 and since, has continued to create a series of lower highs and lower lows. Since 2011, each time Copper has moved above its 200MA line, it has been a time to sell Copper, as it was near a peak, inside of this uniform falling channel.

Ole Doc Copper is now a small percentage above its 200MA at (1) above. Will it be a peak again for ole Doc Copper or will it be something different this time.

What Copper does at (1), could send an important macro message, per seeing if the down trend in Copper will continue.