Retesting November Lows

As we retest these November lows, it helps to compare the conditions in which these lows were made. Back in November the TED spread was off the charts, credit spreads were pricing in a depression-like default scenario, the VIX (CBOE Volatility Index) was soaring and sell-side volume was scary. Fast-forward three months and now we have much healthier spreads, the VIX is still elevated, but nowhere near its November levels (see chart below) and volume is comparatively measly. Commodity prices have also stabilized, helping sop up some of the excess uncertainty. This current test of the November low doesn't seem to carry the authority needed to make another significant move lower. However, much of this will depend on the solvency of the major financial institutions. One slip = fresh lows

S&P put protection on the decline...