What a night in the futures and forex markets! The Premarket is up, but this is to be expected in the final ramp of Wave (v) of [c] within a Broadening formation. So the Premarket is higher, but still under the previous high. Whether it makes a higher point 5 in the 5-point reversal is yet to be known. Either way, the reversal may be abrupt and strong. It is likely that the reversal into Wave 3 may begin by the end of the day.

First, the BOJ announced a rate cut to -.25%. ZeroHedge reports, “It is safe to say that nobody expected the BOJ stunner announced last night, when Kuroda announced that Japan would become the latest country to unleash negative interest rates, for one simple reason: Kuroda himself said Japan would not adopt negative rates just one week ago! However, a few BIS conference calls since then clearly changed the Japanese central banker's mind and as we wrote, and as those who are just waking up are shocked to learn, negative rates are now a reality in Japan.”

Topping that announcement, Fourth Quarter GDP rose a paltry .69%.

The BOJ announcement spiked the TNX below its Cycle Bottom and Head & Shoulders neckline.

ZeroHedge reports, “Kuroda's decision to go full NIRP-tard is benefitting investors worldwide... in bonds. JGB yields hit record lows, 5Y Bunds are trading below the -30bps ECB deposit rate, and US Treasury yields are collapsing across the curve with 10Y below August's Black Monday lows back to 9 months lows...

US Treasury yields are plunging... 10Y broke below Black Monday lows...”

After breaking its uptrend USD ramped to 99.52. This may have been part of the currency war attempting to weaken the Yen against the dollar.

I will report on the Yen after the open so that we can have an accurate perspective on its retracement.

The drop in the Yen ramped the Nikkei Inx to 17558.98 overnight, completing its Wave 2 retracement of 39.2%. It appears that the ramp may already be over.

Regards,

Tony

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