The Japanese Yen was used to finance a lot of the market’s chips for the biggest trading desks around the world. Yen could be shorted for next to nothing thanks to historically low interest rates with the borrowed funds available to purchase many different assets. But, once traders believed the tables turned cold for the equities or commodities or real estate that these chips were being placed on, “Markers” were paid pack. Heading into last Fall’s eventual lows, the Yen gave you a clue that a lot of big players were taking down their action at a feverish pitch, forced to outbid each other for the IOUs that the pit boss was selling back to them.


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This initial S&P low was put in the day after this Yen spike, shown above, last October. The low was just as questioned as the low this week. Looking back, the “Marker” was telling you that chips were being taken off the table. Perhaps a coincidence, but we were about to watch another 120 S&P points get erased in historical fashion.


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By comparison, over the past two months leading up to the exact same levels and same questions around the S&P this week, the Yen has done the exact opposite.


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Something else is different this time. Dr. Copper is quietly lecturing off the lesson plan again. Admittedly, I am not the best source for comparing Copper’s PHD to other economics professors whose names I do not recall. That’s not their fault. I was most often in the library, skipping class, near the pay phone to trade my stock account. In those days you mashed numbers to spell out symbols (talk about slippage risk). Now my phone could go to class for me with limit orders placed on it ahead of time I suppose.

In the chart above you will see the green line once again showing the S&P from November lows to this week’s same level. In a telling, almost mirror image, the white line below it tracks the futures contract for delivery of 25,000 pounds of Copper. The respect I have for Dr. Copper is less precise than most charts, but over time more profound. Let us not forget that Copper never joined its commodity cousins walking its backers off the planks after making highs in ’08. You see Copper topped out in the Spring of ’06 and might have been telling us that fewer 25,000 pound orders would be needed than any Bull wanted to believe. Might we be watching another early clue that no Bear will believe?

No different than any other clue, I would not trust any one of these by itself. But candidly, I was surprised how they were singing together.

Einstein may have best summed up my own personal feelings about any key level that technicians or fundamental analysis agree upon and see together - perhaps a bit too clearly. To paraphrase his concerned secretary when she warned the great professor - but this is the same exam you used before? He is said to have replied, “It’s okay, you see the questions are the same but the answers are different.”