For Those That Want To Know Update

Let’s start with how I finished the prior note...

“To put a finer point on this, I’m not saying a drift over months and months, I’m arguing a seemingly out-of-the-blue move much in line with what happened in crypto and the markets on Oct. 7. happening at any time within the next few weeks or so, if not sooner.”

It looks like “sooner” is the relevant stance going forward resulting from the chart I posted on Monday in the original and what has since transpired on Tuesday. To wit:

As we sit here on this Wednesday, I’m going to post the chart featuring the same only via the E-Mini™ futures, which I’ve also used in prior notes but have since been rotated to the archives. I was asked about it because its notations were different from the above and asked how it worked out versus the cash market. So, for those of you that may also be inquisitive, here it is as of around 8:00am ET this Wednesday, again, to wit:

As you can now see (the timing is a bit uncanny, no?) we currently sit almost exactly where we were when I made my Oct. 7 “On The Record” note. Where it goes from here? No one knows. However, as I have warned at the top of this note: It would appear we are in the “sooner” rather than later unfolding processes.

Next: It’s always been about Japan…

For the past few years I have been arguing that both Japan, as well as China, was going to possibly be the needle that pops the bubbles globally. I’ve documented it right here showing charts and more – then I stopped. “Why?” you ask. Great question, here’s why…

Both Japan and China took to gaming their “markets” in the same fashion that we here in the U.S. are. e.g., Central Bank intervention or government meddling in one fashion or another. i.e., think: GDP numbers that are a pure fabrication or, suddenly, policy must do’s are turned into never do’s faster than the digital ink is dry on the original do. It would be comical if it wasn’t so serious in its implications.

Yet, with that said, I can give you a visual and a bit of “laughter” using what I wrote back in 2024 as to set the “joke.” Here’s what I mean…

In August of 2024 I wrote the following:

“I’ll make this as succinct as possible…
Japan’s financial turmoil (my conjecture) was the catalyst that rocked U.S. “markets” and more just a few weeks ago. As I keep stressing: Everyone and their pet rabbit across the mainstream financial media is proclaiming “Japan’s learned its lesson, problem solved, BTFD horns-over-hooves!”
So far that appears to have been the right call. However, as I keep trying to point out: Nothing has been solved, as a matter of fact, there are now more fractures in what was thought of as sound footings than ever before.
Update:Japan August 16, 2024

What happened next? Hint: Central Bank, political policy reversals. Result? Just look below for the punchline…

What your looking at in the above is the Nikkei 225™ via weekly intervals. This is Japan’s equivalent to the U.S.’ S&P. As a side note, China’s Hang Seng™ is pretty much the same, so I won’t bore you (or myself for that matter) with another chart.

What to take away from the above is this: Ask yourself – what was the reason, whether it was innovation, manufacturing, ______________(fill in your own guess here) that caused, or better yet, saved, a crashing market to suddenly go from the verge of complete breakdown, as evidenced by the final bottom spike contained in that box, to launch vertical, never looking back, adding nearly 25,000 points in less than a year?

It’s OK, I’ll wait. Here’s a hint though – nothing but political sidestepping, back stepping and jawboning. Sound familiar?

But now Japan is having to revisit the issue with its Bond markets and currency once again – and the implications of a not too swell ending has suddenly been put front and center once again. And all markets will face this music, repeat, all. We’re just witnessing the opening shuffles. For what happens in Asia, doesn’t stay in Asia, as we’re now witnessing in our own Bond markets simultaneously. Again, to wit:

What you’ll notice in the above where I labeled “you are here” is the sudden jump we’ve had in our own 10Y treasury interest rate. Everyone and their pet rabbit is currently blaming the President for this sudden spike i.e., Greenland rhetoric and tariffs, etc. However, what i would propose that although that is causing consternation, its more correlation in effect rather than primary. Japan’s sudden shaking is the causation.

Again, my conjecture, but I’m sticking to it.

As I’ve pointed out over the years (it’s a well know fact, it’s just that everyone wants to act like it’s not) Japan has been the fulcrum for applied leverage everywhere. i.e., short Japan’s Yen and Bonds – buy everything else with the proceeds, for decades.

A hiccup in the underlying structure that allows this (e.g., Japan) and the whole system begins to tremble and shake with indigestion.

The issue now is: will Japan’s latest hiccup turn into full blown indigestion – and the rest of the western markets waver under accumulating negative factors such as tariffs, policy scuffles and more turning its own uncomfortable indigestion – into collective dysentery?

Think about it, for that’s where we are.

You also now have a clearer understanding as to why I just stopped caring about all this from a standpoint of giving daily commentary on all this as I was doing prior. Or said differently…

I never wanted to be a comedian, but trying to give reasoning as to why these “markets” acted or behaved the way that they do in these current times, was making me feel like one. However, what made that even worse was it became less about trying to deliver a punch line and nothing more than delivering a bad joke day after day, after day, after day, after………

However, with all that now said. What’s really at stake right now is if this high-flying ” bad joke” suddenly realizes there’s no longer anything underneath (such as a stable Japanese safety net) and face plants.

As always, we shall see.

Note: This commentary is for education purposes only and is not to be construed as trading or investing advice of any sort. These commentaries/opinions are for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.