The Yen Carry Trade Hypothesis: Testing the Engine Behind 2026’s Procyclical Surge and Defensive Squeeze

Today’s market action extended yesterday’s rotating roller coaster, with ongoing geopolitical developments and fundamentals driving the volatility, that volatility itself has been hinting at (e.g. – 10-day SPX/VIX positive correlation, VVIX relative strength, etc.). Mega Caps displayed notable relative weakness as most of their charts have hinted at. Equity market performance reflected rotation out of tech/mega-caps…