Continuing the CDS theme of the day….

The big talking point of the day has been the state of play and the financial barometer for that – the CDS. Given this point I thought it worth having a look around and seeing what else was going on in the default market – and the answer is quite a bit. When you look at where premiums are compared to where they have been you can start to piece together all manner of points about where markets may be heading.

One of the interesting ones that was seen today actually came about by overlaying a little bit of technical onto the CDS market. Have a look at the chart from China below:

Source: Bloomberg

You can see the chart breaking out of the high side of a symmetrical triangle. Whilst these aren’t readily available to trade for most people the trader may be able to garner clues from charts such as this and then look to find wider implications in the market.

The question I ask is will the situation in the Middle East cool in the short-term or are there wider implications that will echo in this delicately poised global economic environment.

You can follow Ric and me on Twitter @ RicCharts and DaveCharts respectively.

All the best,
Dave.

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