One of the things I like to watch as an indication of stock market health is the junk market. JNK has climbed along with this recent stock market rally, and the question has to be: Is it forming a head and shoulders pattern or not? Below is a chart of that bearish view.

We are very close to a right shoulder price zone, so if it's going to be a right shoulder, it should either fail soon, or consolidate and create a small topping pattern.

We should also have an idea of a more bullish view. I've highlighted that below in what might be a broadening top pattern. I would expect this in conjunction with the stock market pushing into new highs.

Good stuff to keep an eye on for the trader. Personally, I'm licking my chops to short this again. I was short it a month ago, and waiting for price to give me the green light. It's too early.

Hope all is well.