Are Junk Bonds Forecasting a “Top” in the Stock Market Again?
Even though the fundamental backdrop is favorable for stocks, the inevitability of a continued market rise is palpable. The “Pain Trade” is now clearly lower for both stocks and bonds.
JNK, the junk bond ETF, accurately forecasted the July/early August decline in the stock market. Now, it’s rolling over again—providing a potential warning sign that we may be in for another dip.
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