Looking at the CLO market, it’s indeed a bit uncomfortable right now.

The 1-hour and 4-hour RSI are at 71.5 and 78 respectively, clearly overbought. Especially on the 4-hour chart, after the price surged higher, it started to stagnate, and the MACD histogram has turned negative. Even more concerning is that the volume has shrunk by 30%, a classic volume-price divergence. But the 15-minute RSI is only at 52, moving sideways, and the short-term sentiment remains relatively neutral with no clear direction.

Key price levels: The current 0.72 is a battleground between bulls and bears. Looking upward, 0.74 is the first resistance, and if broken, it points to 0.78. Looking downward, 0.70 is support, followed by 0.665.

What to do? My idea is this — if it can break above 0.74, consider a small long position with a target at 0.78, but set a stop loss at 0.725. If it falls below 0.70, then consider shorting with a target at 0.665 and a stop loss at 0.715. Currently, the price is between 0.70 and 0.74, so I prefer to wait and watch without rushing to enter.

From the current pattern, the serious overbought condition on the 4-hour chart combined with volume-price divergence makes shorting opportunities more worth waiting for. Once it breaks below 0.70, the shorting logic becomes valid. Instead of blindly chasing higher prices, it’s better to wait for a clearer signal.