interbank

TED Target reached: Increasing short positions.

Posted by Investing Freak on November 19, 2009
Market Analysis / Comments Off on TED Target reached: Increasing short positions.

Here we go again.
On September 28 I stated the following:

The TED Spread which measures the general risk in the economy has been rising the last couple of weeks. today alone it rose 5.42% which means interbank loans are now riskier.  This is still not significant enough and I would like to see another 33% increase in the TED before I really put a lot of my sidelined money on the short side.

On the 28th TED was at around 0.195  so a 33% move would put the TED at around 0.26 and today TED closed at 0.262 which satisfies my reasoning for going short.

On October 27th TED was in an Ascending Channel and also stated that a higher TED spread would mean that a major market correction is underway as banks are raising loan rates between eachother. Rising rates means there will be some major trouble in at least the financial sector which allocates 15% of the S&P Index.

Here is the latest Chart of the TED showing the channel that has been broken.  (Click To Enlarge)

ted-11192009

Another Blogger has picked up on the TED and here is Daneric’s TED Chart.
Finally keep in mind that the current TED is still far below the average TED which is at around 0.50 (50 basis points).  We’re halfway there and its good to catch onto this risk indicator before CNBC does.

I will add shorts via options and inverse ETF’s very soon but always use my opinions as a viewpoint and not investment advice. Everyone has different risk tolerances.

Happy Trading,  K

 

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$TED Spread caught in an Ascending Channel Pattern

Posted by Investing Freak on October 27, 2009
Market Analysis / 1 Comment

Let’s start off with once more defining the TED Spread.

The TED Spread which measures the general risk in the economy.  TED increase – is a sign that lenders believe the risk of default on interbank loans is increasing.

I first mentioned TED Spread around September 28 and what occurred was a decline in the markets the following week.

Here we are a month later and the TED spread hasn’t lost steam and in fact it is now in an Ascending Channel (Bullish Pattern)
Price Channels usually show trends, With the moves in the TED from Sept 14 till now we are seeing unrest in interbank loans.

I won’t keep the TED out of my radar but wanted to document the current possible move upwards. (Which would signal a major market correction underway.)

In the attached image I realized the lowest trend line isn’t parallel to the other two but it’s close enough to be valid for my benefit. (Click Image to Enlarge)

ted-102709

Happy Investing from K the Investing Freak.

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