{"id":23543,"date":"2025-03-21T07:30:00","date_gmt":"2025-03-21T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=23543"},"modified":"2025-08-22T07:35:57","modified_gmt":"2025-08-22T11:35:57","slug":"the-junk-bond-market-tells-us-were-not-crashing-yet","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-junk-bond-market-tells-us-were-not-crashing-yet\/","title":{"rendered":"The Junk Bond Market Tells Us We\u2019re Not Crashing Yet"},"content":{"rendered":"
\n

Managing Editor\u2019s Note: <\/strong>Jeff Clark has teamed up with TradeSmith \u2013 the premier provider of fintech software, helping investors thrive in bull and bear markets for 20 years.<\/p>\n

It\u2019s also a financial newsletter behemoth featuring in-depth market analysis from some of the best and brightest names in the industry.<\/p>\n

At the heart of this partnership, both TradeSmith and Jeff are dedicated to helping everyday investors navigate highly volatile periods, like we\u2019re in now, so you can profit on both the ups and downs in markets, while exposing yourself to the least amount of risk.<\/p>\n

To reflect this partnership,\u00a0Jeff Clark\u2019s Market Minute\u00a0<\/em>is becoming TradeSmith\u2019s Market Minute.<\/em><\/p>\n

Don\u2019t worry, you\u2019ll still get the same, quick-hit market analysis from Jeff three days a week\u2026 we\u2019ll just be adding other expert analysts into our rotation\u2026 like Mike Burnick in our new Thursday slot<\/a>.<\/p>\n

As always, any questions or comments \u2013 good or bad \u2013 let us know at\u00a0feedback@jeffclarktrader.com<\/a>. \u00a0<\/p>\n<\/div>\n

The Junk Bond Market Tells Us We\u2019re Not Crashing Yet<\/h2>\n

BY JEFF CLARK, EDITOR, MARKET MINUTE<\/strong><\/p>\n

The junk bond market is telling us it\u2019s too early to bet on a crashing stock market.<\/p>\n

There\u2019s nothing wrong with being cautious. There\u2019s nothing wrong with trimming some positions and raising some cash as the stock market puts on an oversold bounce.<\/p>\n

But, betting aggressively on the downside right now is probably a mistake.<\/p>\n

Yes, economic conditions appear to be slowing. Yes, there\u2019s a bunch of political chaos that is adding uncertainty to the financial markets. And yes, the stock market is going to be volatile.<\/p>\n

But, until the high-yield bond market breaks down, the stock market is not going to crash.<\/p>\n

High-yield bonds are a leading indicator for the stock market. When \u201cjunk\u201d bonds are rallying, it\u2019s a risk-on environment. That tends to be bullish for stock prices.<\/p>\n

When high-yield bonds are falling, investors are in risk-off mode. That\u2019s bearish.<\/p>\n

So, it\u2019s useful to note that while the S&P 500 recently traded down 10% from its high \u2013 putting it in \u201ccorrection\u201d mode \u2013 the iShares iBoxx High Yield Corporate Bond ETF (HYG) has recovered to within spitting distance of its all-time high.<\/p>\n

Take a look at this chart\u2026<\/p>\n\n\n

\"\"<\/figure>\n\n\n

There isn\u2019t anything bearish on this chart.<\/p>\n

HYG is trading above all of its various moving average lines. And, the moving averages are in a bullish configuration \u2013 with the 9- and 20-day EMAs above the 50-day MA.<\/p>\n

If the broad stock market was setting up for a crash, then the chart of HYG would be leading the way lower. But, that\u2019s not happening\u2026 yet.<\/p>\n

The action in the junk bond sector suggests the recent decline in the broad stock market is nothing more than a short-term dip.<\/p>\n

Of course, that could change. If HYG starts to break down and lose the support of its moving average lines, then we\u2019ll be setting up for a more significant decline in the stock market.<\/p>\n

That will be the time for traders to add short exposure in anticipation of a crash.<\/p>\n

I suspect it will happen at some point this year\u2026 just not right now.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
Editor, Market Minute<\/em><\/p>\n

\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff\u2019s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

The junk bond market is telling us it\u2019s too early to bet on a crashing stock market. <\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-23543","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23543","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=23543"}],"version-history":[{"count":3,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23543\/revisions"}],"predecessor-version":[{"id":24971,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23543\/revisions\/24971"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=23543"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=23543"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=23543"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=23543"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=23543"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=23543"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=23543"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}