Brief Pre Market Post

I've a few matters to attend to this morning...

The unwinding of the Yen carry trade (and I promise I will have more on that later when I have time) means a weaker dollar and makes a futures re-entry at $650 on gold almost irresistible and it almost triggered my buy this morning. As for the stock market, until there is greater clarity on the Yen situation, the stock market will be hobbled. The formula is simple: If hedge funds are being forced to cover Yen shorts, that means funding is disappearing for higher returning investments around the globe. Things like the weak Dell outlook (but a return to 20 seems assured in the days ahead) are just perverse little side shows vs the unfolding main attraction of the carry trade drama.

Here's a scary thought. Monty Guild at http://www.jsmineset.com/ thinks there's upside to 114 to 109 on the Japanese Yen. And a good friend who is a CMT at a leading market maker on Wall Street is telling his team that the Yen would need to rise to 113 to really clean out alot of the carry trades. My spot analysis is that 113 and especially up to 109 would whoop the U.S. stock market. That would also be positive for bonds and I am looking at bond futures entry this morning.

So Yen is the thing to really watch not only today but in the days ahead.