Uh oh... The Japanese Yen has broken through the 160:1 USD level and is now at 161.5
This is after the Bank of Japan raised rates last week to the highest level in 35 years to defend the currency 😬
As long as the Yen keeps devaluing the Yen carry trade continues, that allows firms to borrow at lower rates in Japan and invest in U.S. assets.
The Yen carry trade unwinds when the Yen begins to appreciate, sparking a selloff in U.S. assets as borrowers rush to convert back to Yen and repay loans.
Is the BoJ about to trigger a flash crash?
And the final tell. The money arrived all at once.
Semiconductor ETFs just took in the largest weekly inflow on record. A spike that dwarfs everything in the chart's history, including 2021 and 2022.
This is what tops are made of. Not weakness, euphoria. Record price, record volume, record buying, all in the same week.
O'Neil had a name for it: a climax top. The CAN SLIM playbook teaches that after a long advance, a stock or sector goes near-vertical on its heaviest volume ever, the biggest weekly gains of the entire run. That's not accumulation. That's the last buyer rushing in.
22% of the index. A 5-sigma momentum overshoot. A parabolic third leg. Record inflows.
History doesn't repeat. But it has shown us this exact picture before, and it rarely ends with another leg up.
When everyone is finally certain, there's no one left to buy.
BILLIONAIRE PAUL TUDOR JONES ON BUYING THE S&P 500 RIGHT NOW:
“IF YOU BUY THE S&P AT THIS CURRENT VALUATION, THE 10-YEAR FORWARD RETURNS ARE NEGATIVE WHEN YOU BUY WITH THE S&P P/E OF 22. THAT'S WHAT HISTORY SHOWS.”
JONES CALLED THE 1987 CRASH BEFORE IT HAPPENED.
HE'S NOT PREDICTING A CRASH.
HE SAYS THE CURRENT SETUP IS MORE LEVERAGED THAN ANYTHING HE'S SEEN, INCLUDING 2008.
“THE STOCK MARKET'S REALLY HIGH, AND IT'S GOING TO BE REALLY HARD TO MAKE MONEY FROM HERE.”
LIQUIDITY WARNING: KEY LEADING INDICATOR TURNS NEGATIVE FOR FIRST TIME SINCE 2021
U.S. LIQUIDITY CONDITIONS DETERIORATE AS EXCESS LIQUIDITY INDEX FALLS BELOW ZERO
HAWKISH FED AND TIGHTER FINANCIAL CONDITIONS FLASH WARNING FOR EQUITIES
What happens when we overlay the Dot-Com bubble of 2000 directly over the AI bubble of 2026?🤔
The visual is all one needs. The eerie similarity in time frame, structure, and character reveals everything. Nothing ever changes ... the same speculative cycle, the same crowd delusions, the same inevitable path.
For your private perusal… 📖
enjoy.
She's beautiful.
BREAKING: Iran has shut down the Strait of Hormuz and has indefinitely suspended negotiations with the United States following Israel's strikes in Lebanon.