Random Thoughts: Japan, Leadership, and Sector Rotation

By Todd Harrison  MAY 30, 2013 11:02 AM

Seeing both sides in an increasingly complex world.


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
Japan took it in the teeth last night, losing another 5%, making the 12-session correction tally a meaty 15%. Yes, Japanese equities have had a heckuva run—they’re still up 30% as measured in yen (12% when measured in dollars)—but that’s a different conversation altogether.

While Nikkei (INDEXNIKKEI:NI225) futures are currently trading higher (based on reports that Japanese pension funds may be able to increase their investments into equity markets rather than Japanese government bonds), we would be wise to pay attention to the volatility. 
We’ve seen it in gold and other commodities, and now we’re seeing it overseas. Volatility, like a virus, has a way of spreading quickly.

I've mapped a one-year chart of the S&P (INDEXSP:.INX) vs. the Nikkei for purposes of comparison.  As always, it won't matter until it does, but you always want to see both sides when proactively managing risk.

Random Thoughts:


Twitter: @todd_harrison

Position in SPY.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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