The collision of global markets and social mood

Friday, January 10, 2014

The Other More Important News

Just 74,000 jobs were added in December but the jobless rate magically went down. This is not the news I'm interested. The news I'm interested in took place yesterday and no one cared.

Japanese consumer sentiment just suffered the largest 6-month drop since 2007. This was the lowest reading since Abenomics started.

Why is this a big deal? Because if Japanese consumers aren't confident enough to spend more, Abenomics -- for all its bluster and shock & awe -- will fail.

If it fails, the Nikkei will tank. The yen will soar. And the failure will be an enormous canary for QE efforts by the ECB, BOE, and the Fed. The results could spark a large dislocation across many of the world's financial markets.

Keep an eye on it.

Keeping an eye on the futures too after the jobs data. They're in the middle of their post-news range. This means to me that the 1846 level on the cash S&P mentioned yesterday is still possible, while the 38% Fib retracement level at the 1818 level is fair game too. Still thinking puts higher and calls lower.

Sustained trade above 1846 probably brings new highs.

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