In early October US high-yield spreads declined to the narrowest...

In early October US high-yield spreads declined to the narrowest level since July 2007 (when the spread between junk and treasury yields bottomed then rose which forewarned of a stock market top). Here we are again!

In just the last 6 weeks credit spreads have widened 36% leading stocks lower. As liquidity dries up spreads will quickly widen and stocks will quickly fall, along with other risk assets. Bear markets unfold faster than bull markets which is why it's past time to prepare. Those who failed to take the warning in July 2007 should heed it now.