Update: TED Spread on Watch for Breakout
- Posted by DynamicHedge
- on December 29th, 2011
While the market has rallied off the lows, the TED spread continues to march higher. I was monitoring this indicator of bank health and counter party trust at the end of November for a breakout above the 2010 highs. It has officially broken out.
I would not ignore this key metric of credit health. January is looking like a month to play defense until proven otherwise.
Here’s the 3-month chart. Can you spot a trend?:
Here’s the breakout (3-year chart):
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DynamicHedge is an equities, futures and derivatives trader based on the West Coast. He runs a long/short opportunistic relative-value strategy within a proprietary trading group. More
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