{"id":219911,"date":"2025-03-13T09:44:51","date_gmt":"2025-03-13T13:44:51","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=219911"},"modified":"2025-03-13T11:13:25","modified_gmt":"2025-03-13T15:13:25","slug":"chart-advisor-high-yield-spreads-widen-to-six-month-high","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-high-yield-spreads-widen-to-six-month-high\/","title":{"rendered":"Chart Advisor: High Yield Spreads Widen to Six Month High"},"content":{"rendered":"\n<p>By\u00a0<a href=\"https:\/\/links.investopedia.com\/u\/click?_t=36ba8fa8372241d58b3bfc06997a4332&amp;_m=77de9afea9f44a6698d7636e53cc5d50&amp;_e=BTqcLhot0BkaCaVj13ZboGSTtqdzlQdIzQ549b_xszHPk77TZNFOzanL9QzabOjmNC59CZjlwpaIraC30GPQFXcz6dWBO4Ybq_-hLqFuHKNZOsgaLRPtcZNbCiwO_n4SmSmKSusuCVcy6kDUbhbdd-69s5jdcDjx7ocAcvc0GXDqG3lkRwZ5Lu8A4FTX6yfsRD0fQPzIjc02xKEOj2u-Siagqe3E9TKyRWK585LfFID8RiSUJu810V9Hg2WmpgORAgToqi3o7WejnlRo2cBYLTlyHlgG_GnqFPRdZkkJWVsd7CgVPwM3P2BAa3r3lRZvucdtxUZ9Ulet-SK-QGrDg3btx9hUQHBi58ctfbCT3PMHJrnnNY_HOkVM7f9CD9mRySH2M2Lj3c60WQW1jm5aEnLyv2vpk81HiL9JL_-zc7jm9iUD4LpE6ik6K_ZUrFd8GjV2OMJlVEQQtqiXPQjl52itzRTcIy-A4C-vcgTEDdc%3D\">David Keller, CMT<\/a><\/p>\n\n\n\n<p><strong>1\/ High Yield Spreads Widen to Six Month High<\/strong><\/p>\n\n\n\n<p><strong>2\/ Nvidia Bounces Off Downtrend Channel Support<\/strong><\/p>\n\n\n\n<p><strong>3\/ Micron Settles Into Consolidation Phase<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with CMT Association on this newsletter. \u00a0The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1\">1\/<\/h2>\n\n\n\n<p><strong>High Yield Spreads Widen to Six Month High<\/strong><\/p>\n\n\n\n<p>High yield credit spreads have widened to their highest levels since September 2024.\u00a0 And while we\u2019ve observed plenty of risk-off signs so far in 2025, this one is perhaps even more concerning as it involves a cohort of investors that are usually well-attuned to market risks.\u00a0 With both high yield spreads and the VIX increasing over the last month, two key measures of market sentiment are now signaling a risk-off environment.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"550\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/HYIOAS-1100x550.png\" alt=\"\" class=\"wp-image-219912 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/HYIOAS-1100x550.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/HYIOAS-700x350.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/HYIOAS-300x150.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/HYIOAS-768x384.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/HYIOAS-1536x768.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/HYIOAS.png 1600w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/550;\" \/><\/figure>\n\n\n\n<p><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>The top panel shows the ICE BofA US High Yield Index Option Adjusted Spread, plotted using an inverse scale.&nbsp; The second panel shows the VIX, again using an inverted scale, followed by the S&amp;P 500 in the bottom panel.&nbsp; The first two panels use an inverted scale because higher values tend to coincide with weaker stock prices.<\/p>\n\n\n\n<p>We can see that credit spreads were narrowing through most of 2024, reaching some of the lowest levels on record in Q4 2024 through the beginning of this year.&nbsp; This suggests bond investors were perceiving a risk-on environment, pricing in a low probability that companies would be unwilling to meet their debt obligations.&nbsp; This widening of high yield spreads over the last four weeks suggests another \u201cchange of character\u201d for stocks, as bond investors begin to perceive elevated probability of defaults.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2\">2\/<\/h2>\n\n\n\n<p><strong>Nvidia Bounces Off Downtrend Channel Support<\/strong><\/p>\n\n\n\n<p>Shares of NVIDIA Corp. (NVDA) popped higher on Wednesday after almost two straight weeks of daily declines.\u00a0 This countertrend bounce off the lower end of a downtrend channel is very much in line with a short-term upswing within a larger bearish technical structure.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"550\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/NVDA-1100x550.png\" alt=\"\" class=\"wp-image-219913 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/NVDA-1100x550.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/NVDA-700x350.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/NVDA-300x150.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/NVDA-768x384.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/NVDA-1536x768.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/NVDA.png 1600w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/550;\" \/><\/figure>\n\n\n\n<p><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>When NVDA gapped lower in mid-January, this took the stock well below a key support level around $132.&nbsp; And while the upswing in early February took NVDA back into the range of the previous consolidation phase, bears once again took control to further validate a downtrend channel featuring parallel trendlines of support and resistance.<\/p>\n\n\n\n<p>While this week\u2019s bounce appears bullish on the surface, a further evaluation shows that this could perhaps just be a natural upturn after testing the lower trendline.&nbsp; While a short-term bounce could provide a swing trade opportunity on the short-term time frame, the medium-term bearish structure would remain intact as long as NVDA remains below trendline resistance using the upper end of the channel.&nbsp; As always, a pattern of lower highs and lower lows means the price is in a confirmed downtrend!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3\">3\/<\/h2>\n\n\n\n<p><strong>Micron Settles Into Consolidation Phase<\/strong><\/p>\n\n\n\n<p>While many semiconductor names have flashed clear distribution signs in recent weeks, Micron Technology (MU) remains firmly entrenched in a consolidation phase.\u00a0 Here we\u2019ll demonstrate the \u201cstoplight\u201d approach to identify opportunities if and when the stock finally exits this sideways trend phase.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"550\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/MU-1100x550.png\" alt=\"\" class=\"wp-image-219914 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/MU-1100x550.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/MU-700x350.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/MU-300x150.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/MU-768x384.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/MU-1536x768.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/03\/MU.png 1600w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/550;\" \/><\/figure>\n\n\n\n<p><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>After last summer\u2019s drop from a peak around $155 to a swing low at $85, Micron settled into a sideways trend that has lasted almost eight months.&nbsp; MU has bounced between support at $85 and resistance around $110 numerous times, with the 200-day moving average also reinforcing resistance during that period.&nbsp;&nbsp;<\/p>\n\n\n\n<p>In this sort of situation, I tend to favor a stoplight approach based on the validated support and resistance levels.&nbsp; If MU can push to a new swing high above $110, that would suggest a potential retest of the 2024 high.&nbsp; A drop below support around $85 would confirm a new swing low and imply a high likelihood for much weaker price action going forward.&nbsp; In the meantime, given the well-established price range and anemic momentum readings, investors are perhaps best served by looking elsewhere for actionable opportunities.<\/p>\n\n\n\n<p>&#8212;-<\/p>\n\n\n\n<p>Originally posted 13th March 2025<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By\u00a0David Keller, CMT 1\/ High Yield Spreads Widen to Six Month High 2\/ Nvidia Bounces Off Downtrend Channel Support 3\/ Micron Settles Into Consolidation Phase Investopedia is partnering with CMT Association on this newsletter. \u00a0The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest [&hellip;]<\/p>\n","protected":false},"author":186,"featured_media":219915,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[14,15,18,6,8,9,22,23,26,3],"tags":[16246,624,1385,317],"contributors-categories":[13686],"class_list":{"0":"post-219911","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-etfs","8":"category-fixed-income","9":"category-macro","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-stocks","14":"category-technical-analysis","15":"category-text-articles","16":"category-traders-insight","17":"tag-ice","18":"tag-mu","19":"tag-nvda","20":"tag-vix","21":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO 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