The stock market has been in rally-on mode for much of 2025.
But in recent weeks, stocks have wobbled. Will this simply turn into another period of consolidation or will it turn into a more meaningful correction?
One indicator that can help us understand how much risk investors are willing to take is by watching junk bonds… or in today’s case, the Junk Bonds ETF (JNK).
Right now JNK is testing an important price support. If it holds, this may mean that stocks firm up and turn higher. If it breaks, it could mean a larger correction is underway.
Note that the following MarketSurge charts are built with Investors Business Daily’s product suite.
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$JNK Junk Bonds ETF Chart
As usual, I like to show a simple chart that highlights the analysis for you. In short, the 200-day moving average and $96 combine to create major price support. Watch this area for tells on what’s next for stocks.
Twitter: @andrewnyquist
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
