Spike in Credit Spreads continues...As I wrote on March 4th after February monthly closing...the RSI on credit spreads made a higher high with Feb closing which indicates a change from a down trend in credit spreads to an uptrend; which is not good for risk assets.
Now that March has closed; you will see yet another spike in the RSI to close at another higher high. This spike in RSI is actually rather large even though credit spreads are still less than 4.
I've seen a lot of people on X laughing at people who have mentioned that credit spreads are "spiking" because when you look at the graph of credit spreads they still below 4 and do not appear to be spiking.
Here's the thing...when spreads do spike you will be late to the party!
So what happens when spreads get to 4? Do they do what they did in 2005 or 2014? The answer to this question will dictate how the market will react in the short term.
Eventually however spreads will blow up...it's not an if but a when once RSI changes over to an uptrend.