Below looks at the popular Junk Bond ETF JNK over the past decade.

(Click on image to enlarge)

Junk bonds represent “weak bonds” in the states. Many feel its important to keep a close eye on junk/weak bonds and that they might have some influence on the broad stock market.

JNK remains inside of multi-year falling channel (1). JNK has diverged against the overall rising stock market trend since mid 2014, when it hit the top of falling channel (1).

Since the 2014 high, JNK has created a series of lower highs and lower lows. At this time JNK is testing the top of the blue shaded falling channel and two other resistance lines at (2).

It doesn’t matter until it matters is in play at (2).