Financial Conditions are currently loose, according to my FC indicator.

Conditions have notably tightened following the post US election optimism period (🟡).

But conditions are still generally loose (below zero).

Over the past ten days, all four separate components (credit spreads 🟠🟣, VIX 🔴, MOVE 🟢) have tilted up slightly (tightened).

Since the indicator last changed (flipped green) on November 6 (the day after the US election):

S&P 500 +3%
Nasdaq +5%
MSCI (global stock index) +1%
Bitcoin +45%

My view

My take from this is that the dip we have seen in most risk assets over the past two weeks is likely to be a temporary correction, fueled in part by the end-of-year Federal Reserve liquidity squeeze, and it may already be over.

I'm still wary about the level of the dollar (DXY) in the short-term - I think there is likely to be more upside, which could weigh on asset markets as it continues to hit new highs not seen for two years.

However, both credit spreads and VIX are falling quite a bit today, so this indicator is looking likely to head lower (loosen) in the near-term.

Here's the historic lookback for the FC indicator:

S&P 500

Bitcoin

What is this indicator?

It is an equal-weighted composite z-score (160-day lookback period) including the following four components:

ICE BofA High Yield Option Adjusted Spread 
ICE BofA Corporate Index Option Adjusted Spread 
VIX (S&P 500 implied volatility)
MOVE (US Treasury bond implied volatility)