Pre Market

The indices in Asia were bearish. Europe is also currently bearish.

There is no economic data out today.

Blackstone Group is set to start trading today on the NYSE under the ticker BX. It will be ironic if today marks the all time high for Blackstones share price.

Bear Stearns is attempting a $3.2 Billion bailout of a money losing hedge fund unit of its. This will be the largest bailout since the LTCM debacle of 1998.

Financial stocks are under pressure as of late and today is no exception with BSC MS GS all down in pre market. I believe the markets will continue to act choppy until financials gain a solid footing.

Bond yields are up today with the 10 yr pushing 5.2%. Gold is also on the rise as the US Dollar continues to weaken this morning. The Yen meanwhile has dropped to a 4 year low against the USD.

On a side note, semiconductors look very strong. The SMH and USD look to be great plays for broad exposure to semis.

The US market looks to open lower this morning. Whether early morning weakness turns into something bigger or the bulls rally waits to be seen.

I will be busy most of the morning interviewing prospective admin assistants. In between I will be unloading as much of BX as possible.

Pre Market

The markets in Asia are very bullish save India. Europe is a mixed bag though things may change once the US markets open.

Economic Calendar
Housing starts on Tuesday and Jobless claims, leading indicators and Philly Fed survey on Thursday will be the main focal point this week.

Things to Watch

• the 10 year bond yield . Rising yield = lower stock prices and vice versa.
• the US Dollar. The USD has been gaining strength as of late which may cause the rising equity trend to reverse.
• the Japanese Yen. How much longer can the Bank of Japan keep rates low and how long before the carry trade unwinds.
• the price of Crude Oil. Oil is starting to break out as of late and lets see what affect this has on equities.
• the price of Gold. Gold is at a critical juncture and could go either way. Inflation is still a problem as the CPI showed and I would expect Gold prices to rise.

I expect the market to close flat to moderately higher today in anticipation of tomorrow's Housing data.

Gambling with the Yen

June 18 (Bloomberg) -- Japanese businessmen, housewives and pensioners betting against the yen in their spare time are wrecking the forecasts of the world's biggest currency traders.
The yen has slumped 4.6 percent to a 4 1/2-year low against the dollar this quarter, making it the worst performer among 72 major currencies and confounding predictions by strategists at Deutsche Bank AG and UBS AG for gains of about 1 percent.
The banks didn't reckon on the risk appetite of Japanese individuals, who are borrowing money like never before to buy currencies with higher yields. They tripled their trading in the year ended March to a record $11 billion a day, according to Tokyo-based Yano Research Institute Ltd., publisher of an annual report on the business. Globally, currency trading by retail investors rose 54 percent in 2006, according to research firm Greenwich Associates in Greenwich, Connecticut.
``Japan's interest rates are too low,'' said Hiroshi Ono, a 40-year-old sales clerk at a telephone company in Tokyo. Ono said he has made about $17,000 since March by borrowing $200,000 of yen and buying U.S. dollars to take advantage of the 4.75 percentage-point difference between Japanese and U.S. interest rates.

Read the Rest here
Housewives Outmaneuver UBS, Deutsche Bank in Yen Carry Trading

Reading this article makes me feel the Yen carry trade is going to unwind pretty soon.

RALLY

I expect nothing less than a strong rally in the US markets today. Asia is a stream of green arrows. India up over 2 % , China up nearly 2 % , Japan up 1.2%. Europe is very strong too and the momentum, should carry across the Atlantic.

The Yen has seen a big decline which should help us plenty since, it was this 'unwinding' of the carry trade and subsequent appreciation in the Yen, that was a big factor in the stock market plummet.

The economic data released today has been pretty crappy. Lets see if that puts a lid on US equities. Productivity is down and same store sales stink.

Greenspan is at it again . Now there is a 1/3 chance of a recession. Hmmmm. How does Mr. smarty pants figure that out. 1/3. Why not 2/5 or 1/6 or 30% or............

Will bad debt from the sub prime mortgage fall out be limited ? Paulson certainly thinks so. I do not.

The plan today is to expect a rally. Nothing less than 100 points on the Dow, 25 on the Nasdaq and 15 on the S&P 500. And we have Bernanke speaking . Will he spark of a huge rally ?