Credit Spreads Don’t Lie Alfonso Depablos, CMT April 3, 2025 Sign up for my free note here.Today was tough.Equities got smoked across the board.Transports suffered one of their worst days in history.Semiconductors and Homebuilders completed massive tops.The damage is real.Defensive rotation has been brewing for weeks, and today was yet another reminder the bears are in full control.When it comes to the bond market, nothing tells the story better than credit spreads.A month ago, I flagged the HYG/IEI ratio as one of the most bearish charts out there. Fast forward to today, and it's collapsing to its lowest level in 8 months. One thing I’ve learned is that nothing good happens when credit spreads blow out like this. This is the kind of behavior you see in bear markets.That doesn’t mean we continue to go straight down from here—but it does mean the burden of proof is now on the bulls.This is a guilty-until-proven-innocent market.If they can’t step up soon, things could get a lot worse before they get better.We’ve been positioned short in our Breakout Multiplier strategy for the past month.This week, we’ve been locking in some major gains.Our homebuilders puts are already up 260%. Banks are up 450%. And biotechs 360%.We’ve unlocked all of the original trade idea posts. Click the links above to check them out.And if you want to join the Breakout Multiplier team and get these trades risk-free, click here.Cheers,Alfonso Share Article Filed Under: Alfonso