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Are High Yield Spreads Forecasting Another Stock Market Decline?

By Chris KimbleStock MarketsNov 02, 2024 03:20

ph.investing.com/analysis/contin%C3%BAa-el-movimiento-correctivo-en-el-s-p-500-206998

Are High Yield Spreads Forecasting Another Stock Market Decline?

By Chris Kimble | Nov 02, 2024 03:20

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There are a lot of indicators to follow when trying to project future stock market performance.

But today we look at an indicator that has a pretty strong record of signaling when stocks are near a top.

BofA High Yield Option-Adjusted Spreads

BofA High Yield Option-Adjusted Spreads

Today we look at a long-term weekly chart of the BofA High Yield Option-Adjusted Spreads.

When spreads were low over the past 17 years and formed bullish falling wedges, spreads blew out, and stocks sold off.

Spreads are currently the lowest in 17 years and are forming a bullish falling wedge.

With the elections next week, these patterns could lead to some very interesting price action. Stay tuned!

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