One has to wonder what on earth the market will make of the next few trading sessions before the unveiling of the stress test results on May 4th. There are several pretty significant issues right now with the stress test. The first and most important of which Michelle pointed out the other day in her piece “What the hell is stress test?” The truth is there are a lot of people who don’t understand what the stress test is doing. The stress test is being based on computer generated predictions of where the economy may be in the coming months and years and then our government is left to test how well the banks could stand up in a normal scenario and in the worst case scenario. The overall idea of the stress test is a good one, but there certainly are questions about exactly how everything will be released.

At this point we don’t know what kind of details will be released as far as the government’s findings on each financial company. We do know that the stress test results  are due out on May 4th for the 19 biggest banks, and May 4th will certainly provide a great amount of drama in the markets. The stress test will raise some very important questions about the financial system and whether it can continue to run without a major overhaul in certain areas.

As the bank stress test information is released a whole lot of volatility should be expected as investors really have no idea what to expect. Investors are anxious to receive the results, but then again they are worried that they may not like what they are about to see. All in all my hope is the stress test will prove to be a step forward, but don’t be surprised if there is a lot of uncertainty before it all becomes more clear.