Friday, January 07, 2011

The outlook is good for the stock market.
  • The yield curve is steeply positive.
  • Credit spreads continue to narrow.
  • The VIX holds steady at 17.
  • Fed easing via QE2 is likely to keep the Fed funds rate low.

3 comments:

Anonymous said...

I saw the fed website you referred in your book and past week credit spread is going up. Should I look at daily, weekly or monthly? Also, in your book you mentioned at lower $VIX, people are being complacent and you suppose to sell when everyone else is complacent.

Anonymous said...

I saw the fed website you referred in your book and past week credit spread is going up. Should I look at daily, weekly or monthly? Also, in your book you mentioned at lower $VIX, people are being complacent and you suppose to sell when everyone else is complacent.

Deborah said...

Look at the daily VIX. It got down below 10 at the stock market peak so is still acceptable.

However, stocks have had a long rally and the put/call ratio is below its critical value. There may be a correction soon.