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Junk Bonds have sent an important message to stocks at important tops and bottoms over the past 20-years! Junk bonds sent bullish messages to stocks as they created bullish divergences at the lows in 2003 and 2009.
They also created bearish divergences, sending a negative message to stocks in 2000 & 2007, as they turned lower months ahead of S&P topping.
This year junk bonds have been diverging with the S&P 500 for almost a year. This chart highlights that Junk bonds and the S&P 500 are both testing support off the 2009 lows at the same time.
Keep a close eye on what Junk bonds do between now and the end of the year as they test 9-year rising support. How they perform at support, should send an important message to the S&P 500.