Confluences

Macro Credit Model Confluences

The Macro Credit Model is a top-tier foundational filter that should dictate the context for your other technical tools.

• Divergences: The most powerful signal occurs when equity markets (e.g., S&P 500) make a new all-time high, but the Macro Credit Model makes a higher high in its Z-Score (meaning spreads are widening). This bearish divergence strongly implies the stock market is ignoring underlying structural rot.
• VIX Validation: The dashboard includes a VIX reading. A spike in credit spreads accompanied by a VIX breakout above 20-25 is a confirmed macro risk-off event.
• Quantitative Equity Model: Pair this with the Quantitative Equity Model. If credit spreads blow out into the "Stress" zone, your equity allocation model should be aggressively cutting exposure toward 0%.