After the last decade's financial Armageddon the St. Louis Fed put together its Stress Index, a hodge-podge of various measures designed to tell us the pit in our stomach isn't just the result of one too many Coney Island hot dogs.
Up until now, the Stress Index hasn't been very stressed out. It's been plodding along seemingly unworried by Grexit and Spanic.
Three weeks ago, it ticked up.
But, it wasn't the first one week lift in its downtrend and one week doesn't provide much conviction. So, investors kept reading headlines wondering when it would finally bend.
Friday, the measure obliged by notching a three week high. Unfortunately, it simply confirms what everyone already knows.
This first chart shows you recent action in the measure, including its three week rise.
While the measure is a clear cut reflection of growing strain, it's still well below where we were last fall.
Of course, today we operate in a much more liquid EU thanks to LTRO 1 and LTRO 2. Those programs provided tremendous cheap liquidity to EU banks. They also managed to distort historically useful risk measures including the LIBOR/OIS spread and FRA/OIS spread.
The fact the Stress Index is marching higher amid so much liquidity is bad. And, while it didn't do a heck of a lot to get you out of stocks before Mays' roll, with a -0.61 correlation to the SPX this past year any worsening - or improvement - is worth watching.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.