BP CDS gone crazy. The orange and the green is just the shift today , 6 month protection trading at 1100 bps thats more than greece. Wish I was an institutional player sell a 1 year and buy a 10 year for an arbitrage profit of 510 bps. Break even point is till 1 year falling to 488 which considering the hysteria is not going to happen anytime soon. 50k profit although volume is pretty close to zero. Still holding a short on the share, my analysis says that 36 is the upward resistance for the stock which also happens to be the neck of the 8 year bearish head and shoulders i described before. There is ofcourse another head and shoulder neckline at $50. Equity was up in trading today maybe assuming the $20 billion is some uncertainity removed but still a lot of uncertainity remains. For shorts however a lot of the exagerated panic in the market has been removed and the proposition has suddenly become a lot less profitable. Here is hoping for some more harsh socialist comments by Obama, more news coverage and more BP blood in the waters.
Disclosure: Short BP