High yield corporate bonds show a significant correlation with the risk-on/risk-off sentiment for the S&P 500 (SPX). As we can observe, the current market structure resembles a wedge, which can technically serve as both support and resistance.
To add complexity, we're currently at a channel resistance level, which also happens to be a historic trendline. This trendline has consistently been respected and traded in markets experiencing changing sentiment.
It's becoming apparent that several factors are aligning for the upcoming months when you consider these various charts. This confluence of technical indicators and historical patterns suggests that careful monitoring of these charts is essential as they could provide valuable insights into market movements in the near future.
