Keep Watching This Chart

A crisis has been avoided. [Jeff Clark's Market Minute]( Keep Watching This Chart By Jeff Clark, editor, Market Minute Whew, that was a close one. Let me explain… Two weeks ago, junk bonds were just breaking down. The iShares iBoxx High Yield Corporate Bond ETF (HYG) had fallen below its 50-day [moving average]( (MA) line. Since the price action in high-yield bonds tends to lead the price action in stocks by a few days, we [warned earlier this month]( Recommended Link [“Buy These 5 Cryptos on the Dip” (Get #1 FREE)]( [image]( 17,613%… 21,150%… even as high as 151,323%. Those were gains from former hedge fund manager Teeka Tiwari’s recommendations the last time [this happened in the crypto market](. It’s an opportunity not seen in five years. But thanks to a new technology one billionaire calls beyond “disruptive,” potentially as disruptive as the internet itself… And one that 9 billionaires are investing in (at last count)… Teeka says the window of opportunity is open again. And he just released 5 new crypto recommendations to take advantage of it. Best part?… [You can get the name of his top pick for free. Click here for everything you need to know.]( -- “Unless HYG can recover immediately and climb back above its 50-day MA, it looks like it’s headed for lower levels. And, if junk bonds are headed lower, then the stock market is headed lower too.” Since then, HYG has recovered. It has been rallying for two weeks straight. And, the fund is now trading back above all of its various moving average lines. This action has helped put a bid beneath stock prices. The S&P 500 – which was on the verge of breaking down along with junk bonds two weeks ago – is also back above all of its various moving averages. In fact, the index is within spitting distance of a new all-time high. A stock market crisis has been avoided – for now… Free Trading Resources Have you checked out Jeff's 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 – at zero cost to you. Just [click here]( to check it out. But, we’re not quite out of the woods yet. After all, we’re still in October – a month known for [bearish]( market action. And, junk bonds could still break lower. Take a look at this updated chart of HYG… [chart] [(Click here to expand image)]( If you look closely at the circled area of the chart, you’ll notice that while the price of HYG is just above all of the various moving average lines, those lines are still set up in a bearish formation. The 9-day [exponential moving average]( (EMA – red line) is below the 20-day EMA (green line). And, the 20-day EMA is below the 50-day MA (blue line). In order for this chart to turn [bullish]( the shorter-term moving averages (red and green lines) need to cross above the 50-day MA. That sort of action would confirm a bullish move… It would suggest that HYG has started a new, intermediate-term rally phase, and that would be bullish for the stock market. For the moment, though, we don’t have that confirmation. [New Law Could Impact 330 Million Americans]( HYG has recovered from the early October decline. But, that recovery hasn’t been strong enough, yet, for the moving averages to complete a bullish cross. HYG needs to continue to move higher in order for that to happen. Instead, if HYG starts falling again, then all of the moving averages will turn lower and HYG will confirm it’s still in a decline phase. And, that would be bearish for the broad stock market. Traders should keep watching this chart. The action over the past two weeks has been constructive. But, it could still go either way from here. Best regards and good trading, [signature] Jeff Clark Reader Mailbag In today’s mailbag, Market Minute subscriber Kevin thanks Jeff for his commentary… Jeff, your commentaries [like this one]( are always a joy to read and resonate so well with anyone who has attempted trading at some time in their life. Thank you for all that you do to describe successful trading in terms we all have come across each day. It’s a pleasure to be a subscriber. A fellow Kansan. – Kevin Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com. In Case You Missed It… [Jeff Clark has done the impossible]( He’s found a way to take a seemingly boring stock… and use it to potentially generate thousands – or even tens of thousands of dollars – EVERY MONTH… Without doing anything crazy or complicated. Check out the details right [here]( – including the name and ticker of this stock. 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