JNK Watch

SPDR Barclays High Yield Bond exchange-traded fund (JNK), which tracks corporate junk bonds, has strengthened its bull phase on the macd. The improved signal comes on a price increase that so far has failed to break above the trading range of the past week.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
JNK $37.37

At 1:44 p.m. Eastern

This is the third trading day that JNK has been in bull phase, but until today the signal was hugging the zero line so close as to be invisible. Today it broke to more than 0.02 above zero, and the fast macd moving average crossed visibly above the slow ma.

Against that is Friday's bear phase on Person's Proprietary Signal, a reliable technical tool except during ambiguious change sin the direction, when it becomes quite whippy. The pps had moved to bull phase only four trading days prior to the bear signnal.

The parabolic sar remains in bull phase, and th fast stochastic is pointing up toward bulldom.

Reversal Levels

• $38.78, +3.8%
• $37.83, +1.2%
• $37.37 <== You are here.
• $36.97, -1.1%
• $36.31, -2.8%

The support and resistance levels are narrowly spaced. However, JNK's peak on the three-month chart is $40.24 on April 26, and the low is $36.90 on May 7 (ignoring the May 6 software-driven flash crash). That's a 9.1% spreads, so JNK can show some decent volatility.

JNK's yield of 10.3%, payable in monthly installments, makes it a credible place to park cash and earn some dividends. But there is certainly risk to principal.

One thing in the fund's favor is that is focused almost entirely on domestic U.S. issues: Very little currency exchange risk, pretty much euro-free.

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Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.