The collision of global markets and social mood

Monday, June 2, 2014

Cake For A Sugar High

Let them eat cake.

When it was stated here on Friday that "it does not appear that Ms. Watanabe will be buying as many JGBs as was originally hoped for" it was not a joke. In Japan, private participation in the financial markets is a big deal, a big part of their market. That's why Abenomics is not working, because, like QE, it merely pushes up the price of assets yet provides no real prosperity.

But Japanese financial institutions plan to remedy that.

Women Courted With Cakes as Japan Seeks Stock Buyers

The article is a bizarre example of desperation by central planners that illustrates -- socionomically -- just how late in the sugar high the world truly is. The cake is kind of a sick joke.

But the desperation doesn't stop there. Now the Japanese Government Pension Investment Fund may be ready to sweeten Abenomics. The Fund is predicted to provide as much as $200 billion in foreign asset purchases in order to weaken the yen.

GPIF’s $200 Billion Bombshell to Aid Abe Inflation: Japan Credit

Somewhere on CNBC someone will say it's supportive of the stock markets.

Japan continues to be the biggest potential for disruption with ripple effects everywhere. It is important to keep an eye on it.

Two very important events to keep an eye on this week are the ECB's rate decision on Thursday and Friday's NFP number. The wave structure looks very close to completion of at least a third wave in the ending diagonal shown here:

There is even a small chance that it is close to completing the fifth wave. In either case, a pullback could appear at any time, regardless of news.

Friday's A/D reading closed at a weak 1:1. With the 1925-area Fib target so close by, inverted A/Ds today or tomorrow could provide a reliable sell signal.


  1. We'll see if it means anything but today is 987 Fib trading days from the S&P 1010 low. Never thought we'd reach it, but it's here. 13, 21, 34, 55, 89, 144, 233, 377, 610, 987......

  2. cool, great insight! thanks for sharing!

  3. By the way, the first trading day of June in 2011 and 2012 took a pretty big hit, (down about 2.5% each of those days). This day has historically been the worst performing first day of any month over the last few decades.

    1. Wow, never knew that. Thanks for sharing that too :)