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SPDR Bloomberg Barclays High Yield Bond ETF (JNK) Has Been Rising, Here’s The Resistance

Many traders and investors watch and follow the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) very closely. When money flows into this popular ETF it signals that investors believe the U.S. high yield corporate bond market will continue to rise. The ticker symbol for this ETF is JNK which stands for junk. That means it is a play on high risk debt. When there is a lot of money (liquidity) in the financial system money will flow into these financial vehicles in order to capture the high yield that they pay out. When money comes out of this vehicle it will often signal a potential tightening of the money supply or sometimes even fear in the market. After all, the dividend yield for SPDR Bloomberg Barclays High Yield Bond ETF (JNK) is currently at 4.91%. At this time, there are not many investments paying out a dividend of this size. So when this ETF climbs it signals more easy money or liquidity is expected to continue. 

The SPDR Bloomberg Barclays High Yield Bond ETF (JNK) will have some very strong chart resistance around the $110.50 area. This resistance level matches up with the January 2020 high in the SPDR Bloomberg Barclays High Yield Bond ETF (JNK). That level was exactly when the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) began to sell off as the coronavirus panic took hold. Traders must now watch to see how this important ETF reacts around this major resistance level. Remember, the major stock indexes have all made new all time highs, but the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) has not and is now approaching this major resistance level. A sell side action in the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) will likely signal selling in the major stock indexes as well.  

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