Given the fact that the US (and generally OECD) economic conditions remain extremely weak, the markets might be signaling a reversal of the risk attitudes - overdue after the rallies of the second half of 2009. The first signals came in from the bond markets, where even sick puppies, such as Ireland, have enjoyed some bounce in recent weeks. One can argue that the Greeks are getting away with a murder, as their CDS and spreads are following much shallower dynamic than one would have expected in light of continued concerns as to the credibility of their fiscal adjustment plans.
But the real ticker for troubles potentially brewing ahead is the overall markets behavior.
Here is one interesting chart:
For last week: TIPS up, bonds up, everything else - down. Not exactly a confidence game. And this is compounded by the January effect not playing out this year so far.
Now, not yet as pronounced as on level performance for the markets themselves, but note MCAD cross over and reduced divergence in the last 5 trading days, teamed up with S&P negative movement. Both suggest that VIX downward trend might be breaking.
Irish data is yet to show a clear trend/pattern or resistance breaks -
IFIN is pointing to a gently rising momentum in volatility, ISEQ broader index shows a gentle decline. Plus the highest frequency data I do have relates to daily close prices. But, of course, there are lags relative to the US markets, so something to watch here.