GOIH Capital Markets earlier in a post predicted the market would be down today. The Dow and Nasdaq are both down as well as the Dollar against the Yen. The Yen is trading at 114.63/$, a good point to enter a carry trade since we earlier posted that Japanese exporters have priced in profits with the Yen at 115/$.
Borrow Yen at huge levels and invest in high yield assets, the Yen is sure to correct since the Japanese central bank will intervene to support their exporters the same way the Fed intervened last week to help the large banks.
Volatility has returned and we see an increase in volatility in the global market. Our strategy would be to short the market and go long on volatility in various sectors until the Fed meets on Sept. 18, 2007.