What a hot topic!
Credit Suisse has hit the headlines at the start of this week with grand fears that the bank is more illiquid than it would make out to be.
Many headlines swirling around the interwebs tonight:
Credit Suisse's 5 year CDs jumped as much as 350bps at lunch time today - CDS (Credit Debt Swaps) can be used to index how the market views how risky the bank is. The higher this CD ratio, the more people believe the bank will fail to pay off on its debts, ala a swap of credit ***this may seem like just another nice bullet point, but these levels are higher than what Credit Suisse's CDS traded at during the 2008 financial crisis***
These fears aren't backed by nothingness but more so news that Credit Suisse needs to raise 4 Billion Francs (4 billion USD) of capital in a restructuring effort to keep the company afloat. 2.5 billion in companies owned by Credit Suisse are reported to be readied to be sold but one has to beg the question, with a market cap of 10.31 bn one has to ask where is the money going to come from?
This company was nearly 30bn market cap a year ago and has maintained a downward channel from the day scale down
Locally, the 15min chart shows stochastic RSI has crossed at overbought territory and is heading downward showing momentum flowing downward as well.
Seeing as this is the start of the new week, 3.67 has been established as a new resistance level / support on the path down, but I expect pit stops at 3.79 and a potential retest to 3.88 before it makes a move towards next low for the day
These are historic lows for a company that has never seen this level of capitulation ever, not even comparable to its worst points in historical financial crises; capitulation is better than dying on ones' sword to Credit Suisse so expect a move down from a News angle and a Technical Analysis angle. Monday proved that this sell off is resilient to any macro retest upwards so expect it to be flat before a dead drop.
Credit Suisse has hit the headlines at the start of this week with grand fears that the bank is more illiquid than it would make out to be.
Many headlines swirling around the interwebs tonight:
Credit Suisse's 5 year CDs jumped as much as 350bps at lunch time today - CDS (Credit Debt Swaps) can be used to index how the market views how risky the bank is. The higher this CD ratio, the more people believe the bank will fail to pay off on its debts, ala a swap of credit ***this may seem like just another nice bullet point, but these levels are higher than what Credit Suisse's CDS traded at during the 2008 financial crisis***
These fears aren't backed by nothingness but more so news that Credit Suisse needs to raise 4 Billion Francs (4 billion USD) of capital in a restructuring effort to keep the company afloat. 2.5 billion in companies owned by Credit Suisse are reported to be readied to be sold but one has to beg the question, with a market cap of 10.31 bn one has to ask where is the money going to come from?
This company was nearly 30bn market cap a year ago and has maintained a downward channel from the day scale down
Locally, the 15min chart shows stochastic RSI has crossed at overbought territory and is heading downward showing momentum flowing downward as well.
Seeing as this is the start of the new week, 3.67 has been established as a new resistance level / support on the path down, but I expect pit stops at 3.79 and a potential retest to 3.88 before it makes a move towards next low for the day
These are historic lows for a company that has never seen this level of capitulation ever, not even comparable to its worst points in historical financial crises; capitulation is better than dying on ones' sword to Credit Suisse so expect a move down from a News angle and a Technical Analysis angle. Monday proved that this sell off is resilient to any macro retest upwards so expect it to be flat before a dead drop.