Will Credit Spreads Kill a Rally?

High-yield bond spreads are widening as treasury yields fall. 

I've focused on the March to May 2008 rally in stocks because it's the best example for skeptical bears. Bear Stearns had just collapsed. We know what doom followed. Yet stocks rallied for about two months and gained 15 percent (measured by SPX). It even happened with credit spreads blown out. Here is the spread with IWM inverted.

Here is it now. Thus far tracking step for step.

Here's HYG divided by TLT, another indicator that turns on a dime with the end of QE, tapers and QT, and vice versa.

I do not expect a very strong rally if credit doesn't participate. It could terminate at any time if HYG turns down.  If credit participates, then a large rally of 20 to 25 percent becomes possible.