Trader’s Narrative

Back in May I wrote : Weak Financial Stocks May Not Hold Support Again which turned out to be right on the money.
A bit later in June I wrote that banks where broken:
…I suspect that by the time the Bank Index finds its way down to 65 or thereabouts, the bullish percent index will have […]

Right now the commercial paper market is in an unprecedented seizure. Similar to the TED spread and the “Panic Button” indicator, the spread between the short term high quality and poor quality commercial paper is gone off the charts:

Source: Federal Reserve
If you have scoffed at hearing experts use superlatives, then this chart should bring you […]

We went from lukewarm, boring sentiment overviews to white hot. As the saying goes, “May you live in interesting times”.
Volatility Indices
I complained in last week’s sentiment overview and the VIX responded giving us a real spike to 42.16 (VXN to 40.44).
These are levels at which we can comfortably say there is true fear in the […]

The TED spread is one of the most basic gauges of fear in the financial markets. TED stands for Treasury Eurodollar because originally it was calculated by taking the US 3 month treasury bill and subtracting it by the 3 month Eurodollar contract rate. Today the spread is calculated by taking the difference between […]

The following charts are from Jason Goepfert, of SentimenTrader.com, showing his proprietary indicator called the “Panic Button”.
This indicator measures stresses in the credit market and is expressed as standard deviations from the norm. So a 2.0 means that the aggregate measures are 2 standard deviations from their usual or normal place. Yesterday it reached 9.5 […]