Stock bulls historically like to see Junk Bonds moving higher and get concerned when they are weak. Some view Junk bonds as a leading indicator to where stocks are headed. Some get concerned for stocks when junk bonds reflect a negative divergence to stocks and get aggressive in stocks when a bullish divergence in junk to stocks takes place.

Below compares Pimco Junk Bond Fund (PHDAX)JNKHYG.

The chart above looks at a couple of other times that “negative divergences”

Over the past 6 months, a small negative divergence has been taking place, as PHDAX has created lower highs, while stocks continue to head higher. This small divergence doesn't prove a thing so far. If junk would continue to reflect a negative divergence, they could be sending a caution message to the overall.

If junk would continue to diverge and the NYSE Advance/Decline line would also diverge, which it isn't at this time, then I would be concerned that Junk is sending an important message to stock bulls.