click to enlarge.
The equity market - as represented by the SP future - has been reacting to financial sytem stress, and its calming, since Nov of last year. There are far sexier products to monitor stress but the trusty old EDZ12 contractshown here, remains a valuable compass. A combined rate of the first 4 Eurodollar contracts, called the White Pak, is a great product.
One takeaway became evident in the consolidation CBs like to call stability. Equity prices also moved sideways. This shows the market had discounted incredible earnings and was looking for more CB "juice."
If/when EDZ12 returns to the low 99.50s, it will be interesting to note whether equity can do better than what we've already seen.