Something strange has happened to the TED Spread and the LIBOR-OIS spreads since July. At least strange to me. They have both dropped like a rock. The classical interpretation of a move like this is that counterparty risk has melted away and banks feel free to lend to one another. Hardly a liquidity crisis -- at least for now. However, I haven't found any obvious reason for the sudden drop. [more]
Coldwater Creek popped up in my scans today, busting out to a 40% gain over yesterday's close. As I type this, it is reaching new highs. I don't know much about the retail space to trade it, and I had certainly never heard of this company before. The Google summary page has the following description: Coldwater Creek Inc. (Coldwater) is a national specialty retailer of women's apparel, accessories, jewelry and gift items sold under the Coldwater Creek brand. Spas and high end stores? No thank you! Haven't you heard? The high end shopper is dead! ...or is he? Or she? [more]
I don't know how deep or for how long, But I think we'll see a market swoon starting next week. In fact, I closed my bullish bets in CAPS today. My call is 75% technical and 25% sentiment. As far as the technical part, the indices have been toppish at best for the past 3 days (doji patterns) and the $VIX has been squashed into the gutter with a 3-month low of 21.74. As for sentiment, I think Joe investor will continue to digest the unemployment numbers this weekend and realize that the consumer and employers are locked in a dangerous game of "chicken". Consumers won't spend big in a shaky job market. Employers won't hire big in a tepid buying environment. Right now we need BIG.
On the other hand, my wife and I just went to Wal-Mart for back to school supplies. Folks were buying and the parking lot looked full to me. But I'm fortunate enough to live in the DC area. [more]