We may be near the bottom of the stock market:
1. the put/call ratio is extremely high at 1.4;
2. the VIX at 31 is the highest closing price since the market bottom in March 2003;
3. odd-lot short positions are high
4. we just had the unexpected bankruptcy (Bear Stearns);
5. the Treasury yield curve ended last week almost normal except for the one-month which is a few BP higher than the three-month.
Sentiment is so bad that everything the Fed does to bail us out just drives the stock market further down.
5 comments:
What are your thoughts on the recent rate cut, and the fed funds vs. 13-week t-bill?
http://www.tradersnarrative.com/federal-reserve-still-behind-the-curve-1591.html
The yield curve is fully normalized. Back of the envelope, year ahead GDP is 5.30%.
So other than VISA, is there institutional buying to support renewed bull move?
...was replying under 'Gabriel' the other day...
So I just took a look at the commercial paper spread and it has spiked above 100 basis points.
There is a real flight to safety.
Dear Anonymous,
I agraee. The rate cut doesn't take bad loans out of the market and throw them on the funeral pyre where they belong. The O/N funds rate should be lower than the 3-month bill rate.
Thanks,
Deb
Dear Gabriel, The moribund CD market suggests that there is very little institutional buying going on. Deb
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