S&P 500 is making All Time High and High Yield Bonds are Not

Chart showing a strong divergence between S&P 500 index and High Yield Junk Bonds ETF (JNK and HYG). Interestingly S&P 500 is in the process of making all time high and the high yield bonds are not. Typically Junk bonds have high correlation with the market when the internals fail it is something which is not a good market sentiment for the current uptrend.

Typically at the end of this bull market this divergence can extend anywhere between 3-6 months. Current divergence is approximately 4 month old.

S&P 500 daily charts

Junk Bond ETF

HYG Bond ETF

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