Monday Brief: 5 Things Traders Need to Know Today

Some glaring signs are starting to surface across equities and junk bonds, suggesting the beginnings of a market crash could

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5 Things You Need to Know Today

This is what $150 billion will buy you: One giant-*ss drug company. Pfizer and Allergen are set to merge. I promise you this is dumbest business idea of 2015. Drug makers are under fire, the markets are nearly topping out, and these giant mergers never work. But, it’s almost like Allergen is the most favorite stock of hedge fund managers or something.

Allergen is the Most Favorite Stock of Hedge Fund Managers. In a list of 50 stocks favored by hedge funds, Allergen is #1 on the list. You know what’s #1 on my list right now? Cold cereal. I really want some cereal. If I could get cold cereal in under an hour, I’d be the happiest guy on the planet.

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Amazon Starts One-Hour Delivery. The Prime Now service is available in select cities and I’m going to try it out tomorrow. I’m going to buy cold cereal (Cinnamon Toast Crunch). Cold cereal simply makes everything ok.

Everything is Not OK. Especially with junk bonds. People are beginning to worry about junk bonds. In fact, junk bonds are now performing worse than equities AND quality corporate bonds. The only two times in recent memory when this happened was 2000 and 2007 – in other words, right before market crashes. It’s almost like a pending market crash is coming.

A Pending Market Crash is Coming. Ok, that’s just my opinion. You might not know this, but the U.S. Stock Market is highly correlated to the price of the USD/JPY currency pair. So keep your eye on the USD/JPY exchange rate. If you see this currency pair start to dip … it’s trouble in Stocksville.

Chart of the Day

The USD/JPY has historically moved in 40-month cycles. And in the last 40 months, we’ve seen a 65% appreciation in this currency pair. In other words, no matter what you think about the Fed, or interest rates, or Japanese stimulus plans, there is one hell of a bearish move just waiting to happen.

chart1

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