I have previously talked about the importance alio of thoroughly informed about the trading signals

I have previously talked about the importance alio of thoroughly informed about the trading signals they use for their trading. Otherwise, it's never good. I have eg underlined my skepticism about using lastfartygs'fraktkostnader (Baltic Dry Index) as an indicator of global economic activity, and thus that the buy / sell signal alio for the stock market. See e.g. Cargo ship and its financial importance - Part III The argument alio at the time was that the abundance of newly built cargo ship waiting in the Korean shipyards depresses alio the index regardless of how quickly the wheels of the economy turning. That this has been very much correct, one can eg see in this week's controversy between COSCO and its Greek shipowners. A recent example alio of the need to inform themselves well before acting is European banks and the stress alio they are under right now. I expressed my view the topic in the blog before last and an indicator I NOT used for my prediction is Euribor-OIS spread "The gap between three-month bank lending rates and expected risk-free, overnight, interest rates". It is after all else handy to use this spread to emphasize European banks credit problems right now. And that is the fact many who do. However, this is NOT really OK. Although the spread right now is at 2-year high, approximately 70 bp, compared with an average historical in maybe 10 bp, then it's probably wrong to interpret this straight off as solvesnproblem the banks. The reason is that the spread is a difference between the two quantities, and it enables the large spread may be due to a high Euribor interest rate AND a low OIS rate. And the fact is that the experts, and unfortunately I do not count myself there, argue that it is precisely the latter that is at a record right now. That is, the market believes that the overnight interest rate does not have to be high to be interesting. and this is possibly rather signs of a good liquidity. Mao spread might not be a korret indicator to defend the argument that banks are stressed right now, after all. At least not if by hustling mean överhopta with bad loans .... Yada yada yada ....
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