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The first chart is an overlay of the S&P 500 and two high-yield bond funds: Putnam High Yield (PHIGX) and Fidelity High Income (SPHIX). As Chris points out, the high-yield duo both declined in advance of the twin peaks in the index — much earlier for the first bubble.
Interestingly, both high-yield bond funds also lead the advance off the bottoms. For the Tech Bottom, the high-yields led the 2003 retest of the low. For the Financial Bubble, the high-yield funds bottomed out a good three months in advance of the 2009 index low.
As the "six pack" chart shows, high-yield funds have been on a tear and moved back above their 50-day exponential moving averages after a correction that began in January. If the trend continues, that may be bullish for stocks. But all six are in the vicinity of those January highs. It will be interesting to see if they can move higher.
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