Savior Wealth Market Conviction Compass – Insight Edition

Through Friday, March 20, 2026 Close

Remaining Conviction Level

Approximately 38–41 out of 100
Central estimate: 39–40
Higher scores indicate more conviction to own risk assets; lower scores indicate less.

Overview: One Week Later – From Risk-Off to the Edge of Credit-Event Risk

Compared with Friday, March 13, the Compass has stepped down from a clear risk-off stance into a regime that is now approaching credit-event risk.

A week ago, with the S&P 500 holding the 6,650–6,700 zone, the Remaining Conviction Level was in the low-40s. As of Friday, March 20, the S&P 500 has broken below that support, fallen under its 200-day moving average, and sits roughly 10% below its late-February high. Credit spreads are wider than a week ago, volatility has re-accelerated after a brief mid-week lull, and systematic deleveraging appears to have resumed.

The result is a modest numerical decline in the Compass from roughly 41–42 to 39–40, but the qualitative message matters more than the point change. The balance of risks is now materially closer to a credit-linked leg lower than it was just seven days ago.

What Changed Since Friday, March 13

1) Valuation & Macro – Structurally the Same, Slightly Less Cushion

The additional market decline since March 13 has done little to meaningfully improve long-term valuation metrics. CAPE remains just under 39, price-to-sales remains above 3.0, and Market Cap-to-GDP remains above 200%. In other words, valuations are still historically rich and continue to offer very little cushion against macro or credit stress.

This remains a headwind, but it is not the primary driver of the week-over-week Compass decline.

2) Credit & Funding – Hovering Near the Next Tripwire

Credit conditions deteriorated modestly further over the week. High-yield spreads stayed elevated in the 3.2–3.3% range, and B-rated high-yield OAS reached 3.51% as of March 18, confirming deeper stress at the lower-quality end of the market.

At the same time, funding stress measures such as SOFR-OIS still do not suggest a 2008- or 2020-style seizure. The message is not that markets are in full crisis, but that credit is no longer comfortably cooperative. It is holding at a wider, more fragile level, which leaves the market closer to a credit-stress threshold than it was a week ago.

3) Rates & Curve – Same Stagflationary Headwind

The interest-rate backdrop changed little week over week. The 10-year Treasury yield remained near 4.2%, while the 2s10s curve stayed positively sloped. What did worsen was the inflation backdrop, with oil prices pushing higher as geopolitical tensions intensified.

That leaves the broader environment looking more openly stagflationary: still-high rates, a positive curve, and a renewed inflation impulse from energy. This is still a negative backdrop for risk assets, even if it was not the main reason for the latest Compass drop.

4) Breadth & Internals – From Broken to Breaking Again

This is one of the biggest reasons the Compass weakened further.

A week ago, the S&P 500 was still holding the 6,650–6,700 area, and breadth was weak but not yet decisively broken. By Friday, March 20, the S&P 500 had fallen to 6,506.48, down 1.5% on the day and roughly 10% below the late-February high, while also breaking below its 200-day moving average.

Based on the scope of the decline, it is likely that:

• S&P 500 200-day breadth has fallen below 60%
• S&P 500 50-day breadth has slipped back into the low-to-mid-30s
• Nasdaq 100 and Russell 2000 breadth have deteriorated further
• Advance/decline lines and new highs vs. new lows have weakened again after a brief mid-week stabilization

The practical takeaway is straightforward: the market is no longer just weak beneath the surface. It has now started to break more visibly at the index level as well.

5) Sentiment & Volatility – Acute Stress Returned

Mid-week, volatility briefly eased, with the VIX falling toward 22.37. That improvement did not last. By Friday, the VIX jumped back to 26.78, pushing volatility back into the upper stress band. At the same time, the front end of the term structure flattened and partially inverted, while Fear & Greed readings remained in Extreme Fear in the low-20s.

In plain English, sentiment and volatility have shifted from persistent stress with a hint of easing back to acute stress. That reversal matters because it undercuts the case that the market was beginning to stabilize.

6) Positioning, Leverage & Flows – Deleveraging Extended

Another important drag on the Compass is that deleveraging appears to have resumed rather than ended.

With the S&P 500 below its 200-day moving average and through the 6,650–6,700 support zone, systematic models likely generated fresh sell signals. The renewed volatility spike and broad market weakness also imply another burst of leveraged ETF outflows and margin-related selling. Negative gamma conditions appear to remain in place, which means dealer hedging may still be amplifying market moves instead of damping them.

That means the hoped-for shift from forced selling to stabilization did not materialize. Instead, the market likely experienced another extension of the deleveraging phase.

Why the Compass Fell from ~41–42 to ~39–40

From March 13 to March 20, four main forces drove the decline:

• Credit & Funding: high-yield spreads stayed elevated and B-rated spreads widened further
• Breadth & Internals: the S&P 500 lost its 200-day moving average and underlying breadth weakened again
• Sentiment & Volatility: VIX reversed its mid-week easing and moved back into the high-20s
• Positioning & Flows: deleveraging likely re-accelerated after the market broke support

Last week’s message was: risk-off, but still a correction with credit cooperating.
This week’s message is: risk-off, with credit and internals now close enough to stress lines that a credit-linked leg lower is a real risk.

What Would Improve the Compass from Here

To move the Compass back above the low-40s range, markets would likely need to see some combination of the following:

• High-yield spreads reversing lower toward or below 3.0%
• The S&P 500 reclaiming and holding above its 200-day moving average
• 200-day breadth returning solidly above 60–62%
• 50-day breadth recovering into the mid-40s to 50% range
• VIX falling from the high-20s into the high-teens / low-20s
• Evidence that CTA and leveraged de-risking has largely run its course

Until then, the message remains that the direction of travel has worsened, not improved.

Special Note: Nasdaq Breaks 22,000 – Why 15,800 Matters

The Nasdaq Composite closed decisively below 22,000, finishing Friday at 21,647.61. That break materially worsens the technical backdrop for growth and tech leadership. The 22,000–22,500 zone had acted as an important shelf in recent weeks, and losing it after repeated failed retests is a sign that buyers are no longer defending that level.

If the Nasdaq remains below 22,000, the technical picture increasingly points toward the next major congestion zone in the 15,500–16,000 area, with 15,800 as a reasonable focal point. From Friday’s close, that would imply roughly 27% downside on the Composite. This is not a forecast, but it is an important risk marker for the current market environment.

What to Watch Next Week

Signals That Could Push the Compass Lower

• High-yield OAS above 3.35–3.50%
• Widening in investment-grade and BBB spreads
• The S&P 500 breaking and holding below 6,450–6,500
• 200-day breadth slipping below the high-50% range
• VIX sustaining above 30–32
• Any meaningful sign of funding stress, including a SOFR-OIS spike

Signals That Could Help Stabilize the Compass

• High-yield OAS falling back toward or below 3.0%
• S&P 500 50-day breadth recovering above 45–50%
• 200-day breadth holding at or above 60–62%
• VIX drifting back into the high-teens / low-20s
• Evidence that systematic deleveraging has largely run its course

Bottom Line

The Compass remains in a risk-off posture, and the market has become more fragile over the past week. The key issue is not simply that stocks fell again. It is that credit, breadth, volatility, and positioning all deteriorated together, bringing the environment closer to a more disorderly phase if conditions worsen further.

For now, the most important question is whether credit and breadth stabilize from here — or whether they continue to weaken and pull the Compass lower in the week ahead.