Tuesday, November 5, 2013

Red Flag Remains

From our perspective the greatest near term risk on the horizon remains the fragile structure of the government sponsored recovery in Japan and the potential for the yen to strengthen as participants loose confidence in the efficacy of Abenomics. Like the hard commodity markets secondary failure in the fall of 2011, once the post-breakdown retracement bounce had run its course - downside support was paper thin.   

Until proven otherwise, we continue to favor the short side of Japan.