Stock Market Video Update – Carry Trade Crash Down Leads to a Sea of Red

Index futures are a Sea of Red tonight and the culprit? The collapse of the Dollar Yen (-2.35%) as the Bank of Japan hiked rates into an economic slowdown to try to stave off a deflating Yen that was causing inflation issues for Japan. You know how vicious the carry trade has been for stocks as it unwinds. If you’re not a WOWS subscriber, you’ll see in the video. Tonight is no exception. The carry trade is crashing index futures tonight.

The Nikkei 225 was at an all time high just 3 weeks ago, now it is suffering the worst 2-day collapse in history, even worse than Black Monday of 1987, and taking U.S. Index futures lower with it.

I started recording this video before futures opened Sunday night. S&P futures are currently down -1.95% and NDX down -3.9%. That’s going to trigger CTA selling if the losses hold by the cash open. The latest CTA sell threshold estimate is just below the S&P’s 100-day, where it formed a bear flag on Friday afternoon, but held above by the close. The next CTA sell trigger level for the SPX is [subscriber information]. Futures are sitting at $5266.75 presently.

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It’s not just stock index futures, but Bitcoin futures are down over -14%.

I’m not seeing as strong of a flight to safety trade as I’d expect, but there’s some.

Don’t be surprised (as covered in this video) if the market crashes down to force the Fed to cut rates intermeeting. If they do, I’ll be [subscriber information].

It’s been a late night. It’s 1:30 a.m. ET and I haven’t even had dinner yet, so I hope you are able to take in the video and for those of you still in volatility long trades based on our ABI signals, I’m rooting for you! Let me know how you’re doing. It looks like it’s going to be an interesting start to the week. I’ll see you in a few hours.