The TED Spread is not moving on the Ireland bailout and the possible 'contagion' to other Euro sovereign debt. TED has held under 15 since 11/24/2010. A sharp breakout would be an indicator to start protecting equity positions. Until then, the risk level is lower.
However, since November 5th, the EUR/USD currency pair has been falling, implying weakness in the Euro currency. And, the Emerging Country Sovereign Debt ETF PCY is showing short term support. I expect a retest of that support ($27.25), since everyone wants to see whether this is a real crisis forming.
The CSFB moved higher since November 5th, 2010, and fell back slightly on the 12th and 26th, both down days after either a running bull the day before. The cost of protecting a position is lower now relative to September 20th, and the market was 5% higher between September 20th and November 24th.
As the market has chopped around the SPY 120-118 range, the risk premium has gone nowhere but up between 11/16-11/29. A confirmed downtrend would be at least two consecutive days where SPY break lower, with a move lower in the CSFB.
