[Roccland]

http://www.nni.nikkei.co.jp/CF/FR/MKJ/

Could be the great unwinding...

[jboogy]

I didn't read the link Rocc, I don't follow the nikkei so maybe you could give us a synopsis of what it means.Is 455 alot for this index?I'm serious, I don't have a clue about the asian stock market.Thanks in advance

[strider3700]

It's about 2.5% not good but not world ending. what I find more interesting is the gain in value for the us dollar today. the cdn dollar and the yen both lost about a cent today

[Roccland]

Well it looks as though foreign markets may be questioning the fiscal policy of the Fed. Similar to what occured on 2.27.07

Related is the Yen Carry Trade...I have snipped a piece from market-ticker probably one of the best free blogs on the web for daily financial analysis...todays analysis is a must read.


$this->bbcode_second_pass_quote('', 'T')hese are all very bearish signals!

What kicked it all off today? Two things:

Rumors that there is a German bank that is in potential trouble and that at least one US bank is on the hook for more than $80 million in bridge loans that they cannot syndicate.
A potential forced unwind in the carry trade. What? Yep. The same thing that blew up the markets in February!
The latter is a really big deal. In the wee morning hours the Yen started to strengthen precipitously as rumors about the hung deals swirled, and against the dollar it was bid hard. The Yen is now under 119. Somewhere in the 118-117 range this gets totally out of control. Exactly where? I don't know. But this is potentially very serious and if it starts to melt then we're going to see the liquidity disappear almost instantly.

The LBO deal window has snapped closed and been chained.

So now we want. Tonight will be very interesting over in Asia. WATCH THE FX MARKETS TONIGHT! If the Yen continues to strengthen .vs. the dollar (and perhaps even if it holds here in the 118s) you will see something nasty happen over in Asia. (PS: Late update - we got a little problem here; 118 is now being assaulted in the Yen; if it breaks into the 117s things are going to get nasty fast!)

How about us tomorrow? Well, much will depend on the GDP report tomorrow morning. Consensus is for 3.2%; if it comes in weak, and certainly down in the 2% or worse range, then Katie Bar The Door!

Read the market action in the morning before committing anything serious to this. But - we could certainly be seeing the start of something serious on the downside; we have, at present, the DOW, Transports, and Nasdaq sitting on second-level support with the S&P under it. If those levels break then we are targeting the February/March lows and, if those levels do not hold then the Summer '06 levels are a potential downside target!

PS: For those who argue that there is an active "PPT" who prevents "plunges" - where were they today? It would have been trivial to spike the S&P futures 2 minutes before the close - we've seen it done before - and prevent this critical support violation on a closing basis. It didn't happen. Draw your own conclusions.

[jboogy]

Thanx, a lot of it gave me a fly-by but I think I got the gist.I was under the impression that no one really doubted the PPT existed anymore,is there a possibility that PPT is a figment of some fevered imaginations? I know that all markets are interconnected to some degree but I thought foreign indexes were much more susceptable to U.S. hiccups than we were to their swings.Is the worlds mightiest economy susceptable to disruption based on the performance of foreign indexes?Someone better tell Neil Cavuto.

[evilgenius]

The PPT doesn't want to save the rally any longer. The Fed and others have been working counter to that for some time. If they are at work doing anything now it is to actively seek to destroy demand. Demand destruction is necessary in order to preserve the order, if you will.

That, of course, doesn't mean such an ad hoc organization really exists. The same thing will happen anyway because the super-organizations will act in their own interests. It just so happens in a retrenchment their interests are not your interests.