JNK and HYG are currently yielding more than 7%, while yields on the 10-year Treasury note are hovering just north of 2%.
Chris Kimble at Kimble Charting Solutions on Monday said “some softness is taking place” in JNK, as well as a potential head-and-shoulders top.
High-yield bonds have been “great tools to help call major tops and bottoms,” Kimble wrote in an investment newsletter. He said to watch for warning signs in junk bond ETFs if they’re weak on days when U.S. stocks are rising.
SPDR Barclays High Yield Bond