Wednesday's Market

What a strange week so far. Markets in the US continue to ignore FED expressions of Balance Sheet normalization, while China's equity markets drop night by night. The warning signs are lining up. Below is Morgan Stanley's checklist for trouble in the market.

All in all it's an interesting time to be trading and investing. Nothing is easy and the top Hedge Fund's in the world, the best traders, are only up 6%-8% so far this year. I'm doing better, but not by much as some stocks just won't move. We'll see with this earnings season if we can get some big jumps up.

On the short side we continue to see reminders of 1999 dot-com bubble. Companies with no earnings, and no history of earnings, and no hope of every making a GAAP profit continue to rocket higher on sales growth and promises of future profits.

With rates rising this bubble will pop, and real profits will matter again, just like it did then.

Another trade we're waiting for is Japanese yen destruction. The yen keeps depreciating and as it breaks upward we'll be ready to capitalize. My mark is $125, once it breaks through 125 I think it's going to 400 and we'll be making money the whole way, but we'll wait for confirmation.

We'll see about the rest of this week, and add to a couple shorts tomorrow as the market continues to grind higher, a pullback seems due.

I'm paying attention to this chart in particular.