JNKTLT A bond ratio that could give a perspective on stocks

Jun 16, 2022

This is the ratio of High Yield Bond ETF to the 20Y T BOND. Not a ratio seen a lot but on the 1M time-frame it provides some perspective to the periods of high volatility/ correction on stocks. The blue trend-line is the Dow Jones (DJI) index (stocks). As you see, every time the JNKTLT ratio hit its Lower Highs trend-line, stocks have turned sideways at best, undergoing a volatility phase.

Last month, the ratio closed above that line for the first time in history. Even though we are on a sharp correction since the start of the year, does that break-out mean that it enters a new bullish trend and completely different pattern? And if so, could it indicate that the correction is about to take a stop? What do you think?



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