About

Blue is the extra yield on CCC-rated and weaker bonds minus the extra yield on the whole US high-yield market. Both are Intercontinental Exchange (ICE) Bank of America (BofA) option-adjusted spreads (OAS) over Treasuries. Amber is that gap's 252-session z-score on the right axis, dashed red is the 1.75 trigger, and yellow and red bands mark Debt financed and Alert.

Instructions

Check the badge first. Look for Debt financed, amber above dashed red, and Treasury Yields confirming for three sessions; Alert needs all three. Read the badge note for the missing piece.

Signals

• Cash financed - Trailing-four-quarter debt over capital spending (capex) is below 0.30. Alert cannot fire.
• Debt financed - A large share of AI spending runs on debt. The note says whether the z-score or the yields hold back Alert.
• Alert - Weak-credit bonds are under stress, and Treasury yields confirm it. Both held for three trading days.

Symbols

• BAMLH0A3HYC - ICE BofA CCC and lower option-adjusted spread, via FRED. The plotted spread is this minus high yield.
• BAMLH0A0HYM2 - ICE BofA US high-yield option-adjusted spread, via FRED.
• DGS2, DGS10, DFII5 - two-year and ten-year Treasury yields and the five-year real yield, via FRED. The slope is ten-year minus two-year, computed here rather than read from a spread series.
• AMZN, GOOGL, META, MSFT, ORCL - the hyperscaler basket, from SEC filings. Supplies the Debt / Capex ratio that arms the regime.