High Yield bonds are a clear indicator of risk appetite in the market. In benign conditions, investors flock to this asset and prices keep rising. When conditions tighten, investors run to safe havens and this asset class falls.
See the JNK prices when covid happened in early 2020. Prices fell and went below the moving averages. After the March low, they have been rallying and are currently at new highs. This shows fear perception in the market is very low.
The above chart shows the relative strength of JNK vs TLT. The message is similar. When conditions are tight, this ratio falls (like in March 2020) and when fear perception is low, this ratio rises.
Currently this ratio is rising, which suggests we should stay long risky assets.