What's the Old Saying? Credit Leads

High yield corporate bonds (HYG ETF, first daily chart, below) are sporting fresh breakdowns this morning, not to mention junk bonds and investment grade corporates (LQD ETF on second chart). Simply put, credit is starting the month and quarter with a fairly resounding bearish tone amid higher rates. 

This action stands in stark contrast to the Pavlovian response by equity bulls to pile back into the mega cap tech leaders, at least so far in today's session. So while NVDA GOOGL AMZN and the like exude more relative strength, many other parts of the market like biotechs, small caps, and the like remain weak. 

That said, the overall rally attempt has been particularly soft, especially in light of the forty-five day stop-gap spending Bill passed by the Senate to avert an imminent government shutdown. One would have expected a vicious squeeze, but so far the action has been about as tepid as it gets. 

Still, it is tough to shake the old Wall Street axiom that credit leads (stocks), as that is particularly pronounced in this setup going forward. Should HYG JNK (Junk Bond ETF) and LQD all continue to break down I will continue to bet against equity bulls permanently burying their heads in the sand.