Yen Carry Trade Alerting Major Cracks

For the past 2 years, the USD/JPY has been the carry trade of choice for big institutions. The proceeds they have earned from this trade have been used to leverage themselves up on S&P Futures contracts. Simply put, as long as the USD/JPY is rising the stock market stays afloat. Over the last 3 trading days we have seen some major cracks in the armor as the USD/JPY is screaming higher, and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is trading lower. This is a change of character for the market and should be duly noted. Keep an eye on this relationship as it is a big tell for the near term future of the markets at this time.

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Evan Poechman
Elite Round Table