BOJ Action Spooks Markets, Yields Rise, Triple Witching, Oil Turns Higher, Gold Holds Strong

BOJ raises rates but yen weakens, spooking markets; US yields rise, triple witching impacts futures; oil and gold hold steady.

Key Takeaways

BOJ’s less hawkish stance is causing yen weakness and market uncertainty.
US bond yields are rising, causing inverse moves in S&P futures.
Triple witching adds to market volatility and complexity.
High government debt levels constrain central banks’ ability to raise rates.
Technical analysis remains crucial for navigating current market conditions.

What the video covers

Bank of Japan raised interest rates by 25 basis points but showed less hawkish guidance, causing yen weakness against the US dollar.
This unexpected BOJ stance has spooked US bond markets, pushing yields higher amid skepticism about central banks' commitment to rate hikes.
A cat and mouse dynamic is observed between rising US 10-year yields and falling S&P 500 futures.
Triple witching day marks the final expiration of Q3, influencing market volatility and futures trading.
High debt levels in Japan (230% debt-to-GDP) raise concerns about sustainability of rising interest rates.
US government nervous about rising long-term yields and intervening to control rates to avoid economic damage.
Despite short-term bullishness on the S&P 500, there is a cautious outlook for potential future market catastrophes.
Technical analysis highlights key support and resistance levels for the S&P 500 and USD/JPY currency pair.
Upcoming week expected to have less earnings activity but market volatility remains a concern.
Additional topics include Bitcoin trends and swing trade opportunities in stocks like Netflix and CrowdStrike.

Chapters

Why did the yen weaken despite the Bank of Japan raising interest rates?

The yen weakened because the Bank of Japan did not provide hawkish guidance for further rate hikes, signaling a less aggressive stance than expected, which disappointed markets.

How are US bond yields affecting the stock market currently?

Rising US 10-year bond yields are causing an inverse reaction in the stock market, with S&P 500 futures falling as yields climb, reflecting investor concerns about higher borrowing costs.

What is triple witching and why is it significant in this video?

Triple witching refers to the simultaneous expiration of stock options, index options, and futures contracts, which often leads to increased market volatility, as discussed in the video regarding Q3's final expiration.

Full Transcript — Download SRT & Markdown

Speaker A

My name is Gareth Soloway, and I was a losing trader until I mastered technical analysis. Logic and charts beat hype and narratives every time. Now, I teach investors the same techniques that made me a multi-millionaire. This is my trading game plan. Good morning, everybody. Happy Friday. My name is Gareth Soloway, chief market strategist here at verifiedinvesting.com.

Speaker A

trading game plan. Good morning everybody. Happy Friday. My name is Gareth Soloway, chief market strategist here at verifiedinvesting.com.

Speaker A

All right. Bank of Japan raising interest rates by 25 basis points. However, we're seeing the yen weaken significantly against the US dollar. Why is this happening? The big story of the day: Japan, basically, the bank didn't guide towards raising again.

Speaker A

significantly. And this is a big change in character. So, you have central banks that have been raising rates across the board. The US did, the ECB, the Japanese central bank did. And really, everyone was expecting a continued hawkish stance

Speaker A

Significantly. And this is a big change in character. So, you have central banks that have been raising rates across the board. The US did, the ECB, the Japanese central bank did. And really, everyone was expecting a continued hawkish stance.

Speaker A

But I'll tell you one thing, this is spooking the US bond market just a little bit. And we're seeing interest rates start to climb back up. In other words, they don't trust these governments. They're saying, "Hey, listen. These governments may not be

Speaker A

From Japan. It didn't happen. Now, is this a crack in the glass? Is this a crack in the ice that's going to signal to other central banks they may not want to raise quite as much as everyone's anticipating? We're going to find out.

Speaker A

All right, let's jump into the futures here. We have a lot to discuss. Today is triple witching, the final expiration of the third quarter. We'll discuss that.

Speaker A

But I'll tell you one thing, this is spooking the US bond market just a little bit. And we're seeing interest rates start to climb back up. In other words, they don't trust these governments. They're saying, "Hey, listen. These governments may not be.

Speaker A

caught a beautiful rally in the late night, early morning this morning and then all of a sudden we peaked and the S&P futures have fallen off a cliff.

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Serious. These central banks may not be serious about getting their debt under control." And that means that the market will push rates up even if they won't.

Speaker A

started to see the 10-year yield in the US go up and then the markets did the opposite. The markets in reverse went down when the 10-year yield shot up.

Speaker A

All right, let's jump into the futures here. We have a lot to discuss. Today is triple witching, the final expiration of the third quarter. We'll discuss that.

Speaker A

But more importantly, look at this intraday chart. Here's 300 a.m. Eastern time. That's when yields were actually down in the overnight. Look at the move on the 10-year yield. Now, flip over to the ES futures chart. Here's three in

Speaker A

But look at the futures here. This is fascinating. So, this was yesterday's price action. We dipped early in the day and then we kind of rallied up. It was a solid update on the S&P 500. Overnight, markets were doing nothing, and then we.

Speaker A

yield or the the S&P futures? They head right down. So, this is really a cat and mouse game being played between the 10-year yield or interest rates here in the US and the S&P futures. One goes up, the other goes down. It's that simple,

Speaker A

Caught a beautiful rally in the late night, early morning this morning, and then all of a sudden we peaked, and the S&P futures have fallen off a cliff.

Speaker A

Now, let's break this down on Japan. So when you have 230% debt to GDP, can you afford as a country to let your interest rates go up indefinitely?

Speaker A

What's causing this? What do you guys think it was? If you're talking about the Bank of Japan, you would be exactly right. As soon as the Bank of Japan showed that they are not as hawkish as they probably should be, the markets.

Speaker A

going on with rates continuing to go up because it will eventually break their economy just like here in the US. We see the government very nervous about the long end going up and they're trying to intervene. The the problem is this is

Speaker A

Started to see the 10-year yield in the US go up, and then the markets did the opposite. The markets in reverse went down when the 10-year yield shot up.

Speaker A

that have not put fiscal responsibility as a top priority and now they're literally caught between a rock and a hard place. Do you let rates go up and then the market says, "Okay, they're getting their house in order, but it

Speaker A

Take a look at the 10-year yield on the US. It is back to 4.984%.

Speaker A

the levels, I'm still bullish on the S&P near term. But it just continues to reinforce that down the line, there is going to be catastrophe. And that's what I'm continuing to prep for right here and guide you guys to understanding the

Speaker A

But more importantly, look at this intraday chart. Here's 3:00 a.m. Eastern time. That's when yields were actually down in the overnight. Look at the move on the 10-year yield. Now, flip over to the ES futures chart. Here's 3 in.

Speaker A

Again, we're only slightly down. So, we're only going to open down here. We remain above the bullish trend line here. So, as long as we maintain above here, remember we dipped on that panic selling on the back of the Fed. And then

Speaker A

The morning on the S&P futures. Notice that as we've seen the yields go up, the stock market has declined. Flipping back to the 10-year yield, 10-year yield rallies to the upside here and moves higher. And again, what happens to the.

Speaker A

Bank of Japan has just thrown a wrench into that of will central banks really follow through. I've been a skeptic longer term and I continue to be a skeptic longer term. All right, so that's where we are guys. Again, we'll

Speaker A

Yield or the S&P futures? They head right down. So, this is really a cat and mouse game being played between the 10-year yield or interest rates here in the US and the S&P futures. One goes up, the other goes down. It's that simple.

Speaker A

That's your emergency pull the parachute run for cover trend line on the S&P 500.

Speaker A

Unfortunately. And again, it's not simple, obviously, because you're dealing with massive amounts of debt.

Speaker A

little pivot point right up here. Beautiful flat horizontal zone and the dollars into that. I would continue to expect rejection in price off of that level. All right. Now, I did talk about Japan, right? And we talked about the

Speaker A

Now, let's break this down on Japan. So when you have 230% debt to GDP, can you afford as a country to let your interest rates go up indefinitely?

Speaker A

meaning that the yen strengthened significantly against the dollar recently that is being unwound over the last few days culminating with the decision from the boj today. Taking a look here we have the Japanese uh the US dollar JPY or the dollar yen popping

Speaker A

Think about the amount of interest that you're going to be paying on your debt. It's going to your economy. And so I get why the ECB is like or I should say the Bank of Japan is a little bit nervous about what's.

Speaker A

weakening against the US dollar now if we rally up there'll be significant resistance right up here if we continue up but right now it's been a significant move to the upside all right now we talked about the 10-year yield the

Speaker A

Going on with rates continuing to go up because it will eventually break their economy just like here in the US. We see the government very nervous about the long end going up, and they're trying to intervene. The problem is this is.

Speaker A

back up today. And the big thing that we're watching into next week, I was thinking next week might be a little relaxation, maybe not so crazy. There's not a huge amount of earnings next week.

Speaker A

That this is an issue that we made all of us, the politicians, the governments, etc. Now, you and I probably not so much. But our government that we elected, that's just the nature of the beast. We have voted for governments.

Speaker A

We're not to the jobs report yet. And then this right away if we're going to go retest this line, it could be a massively important week next week.

Speaker A

That have not put fiscal responsibility as a top priority, and now they're literally caught between a rock and a hard place. Do you let rates go up and then the market says, "Okay, they're getting their house in order, but it.

Speaker A

5.3% to 5.5% on the 10-year yield. And again, folks, this is the issue that we just talked about is that you have the lack of fiscal responsibility starting to come home to roost. Whether it's in Japan, whether it's here in the US, you have

Speaker A

Bankrupts you, or do you artificially put push rates down, which inevitably causes a catastrophic result." All right, listen. It is not good out there, folks. Listen, and again, I want to be clear. This doesn't actually change my bias on the S&P. As long as we maintain.

Speaker A

after this Bank of Japan decision that maybe the fiscal responsibility is there a little bit. Although again folks, longer term, I don't believe it. Not even from the Fed, not even from Kevin Worsh. They'll go back to their playbook

Speaker A

The levels, I'm still bullish on the S&P near term. But it just continues to reinforce that down the line, there is going to be catastrophe. And that's what I'm continuing to prep for right here and guide you guys to understanding the.

Speaker A

significantly. All right, let's speak speaking of which, let's go to crude oil here. WTI was down early in the day. It is now green on the day. The market just can't buy more than a day reprieve on any front here as again oil is now green

Speaker A

Ultimate outcome. Maybe years down the line, but it is coming, and you got to start to prepare. All right, back to the charts we go. So, the S&P futures again moving lower this morning, after being up sharply going to the S&P daily chart.

Speaker A

back to 106 could be a problem for the markets in the near term. And remember oil going up, it also pushes the 10-year up. So it's not just the fear of fiscal irresponsibility emerging again, whether it's Bank of Japan or here in the US or

Speaker A

Again, we're only slightly down. So, we're only going to open down here. We remain above the bullish trend line here. So, as long as we maintain above here, remember we dipped on that panic selling on the back of the Fed. And then.

Speaker A

which is nice, but again, all of the trucks that are driving goods all over the country, they are burning gallons and gallons and gallons, tens of gallons, hundreds of gallons a day at $645 on diesel. And that is troublesome.

Speaker A

Again yesterday, we rallied right back as yields pulled back on confidence that fiscal adult fiscally was going to be in the room, aka Kevin Worsh and the Fed were going to do the right things to get the situation under control. Now the.

Speaker A

And again, the question is eventually this gets passed through to our food supply. So you go to the grocery store, remember all those vegetables, all that stuff had to be trucked to that store.

Speaker A

Bank of Japan has just thrown a wrench into that of will central banks really follow through. I've been a skeptic longer term, and I continue to be a skeptic longer term. All right, so that's where we are, guys. Again, we'll.

Speaker A

Remarkable. All right. Uh, let's go into a couple other things here. Gold today is showing a little sign of strength, inching up. This is good to see on gold, and I'll tell you why is because yields are up and the dollar's up. So, if gold

Speaker A

Continue to monitor, but S&P 500 still above the bullish bias line, but again, any sort of move down here, I go to neutral and then below here, watch out.

Speaker A

this first pivot to the second pivot. Are we about to break out on silver to the next leg up? Let's watch this closely today on the chart of silver.

Speaker A

That's your emergency pull the parachute, run for cover trend line on the S&P 500.

Speaker A

options, the amount of options expiring will be the biggest ever. All right, 7.7 trillion or more in options. That's trillion with a T in options expiring.

Speaker A

All right, next up, let's look at the dollar. The dollar is up into resistance. Again, we talked about this yesterday. Ascending trend line connecting the major lows here through this low here, and that's where we currently are. And then look at this.

Speaker A

around charts and stocks and even commodities to maybe a little bit of an extent because they're trying to maximize their profits. So it's not like oh this technical this technical level can work. We can wipe out a technical

Speaker A

Little pivot point right up here. Beautiful flat horizontal zone, and the dollar's into that. I would continue to expect rejection in price off of that level. All right. Now, I did talk about Japan, right? And we talked about the.

Speaker A

trade options on occasion. In fact, we're launching a great options service in just a few weeks. But at the same time, you also have to know the game.

Speaker A

Dollar yen. I want to show this because this is really dramatic. Remember the dollar yen had a big correction in it.

Speaker A

institutions to retail. So, you have to understand there's a game there. There's a lot of money they can make if those options expire worthless, which means it's a game that's rigged to some extent if you don't know the game. Understand

Speaker A

Meaning that the yen strengthened significantly against the dollar recently. That is being unwound over the last few days, culminating with the decision from the BOJ today. Taking a look here, we have the Japanese, uh, the US dollar JPY or the dollar yen popping.

Speaker A

pattern that broke down. I was short copper up in here. We did take profits when it came down here with smart money uh commodity and minor members. I'm going to look to reshort copper probably today if it inches up just a tiny bit

Speaker A

Significantly today. We had this big drop, and now again, with any sort of hesitation from the BOJ, the yen is weakening against the dollar, and that's what this is showing. When this chart goes up, it tells us the yen is.

Speaker A

Let's look at natural gas real quick. We'll touch on oil again as well, but NAT gas today is showing again just nothing going on. And really what's remarkable about um natural gas is that really from July, early July price has

Speaker A

Weakening against the US dollar. Now, if we rally up, there'll be significant resistance right up here if we continue up, but right now it's been a significant move to the upside. All right, now we talked about the 10-year yield, the.

Speaker A

Obviously, the dynamics are different. the natural gas issue isn't the same as what's going on in the Middle East. But at the same time, seasonality is coming.

Speaker A

10-year yield I do want to show the daily chart because this is really where it matters. So again, this is your daily candle. Nice pop right back up, almost negating yesterday's pullback post-Fed of the 10-year yield, but we're right.

Speaker A

crack spread's gotten better for them. So, their stocks have actually gone up. Valero, MPC, uh, Philips 999, which is PSX. But this is a this is an outlier. I just heard about this today is that in Europe, they're talking about

Speaker A

Back up today. And the big thing that we're watching into next week, I was thinking next week might be a little relaxation, maybe not so crazy. There's not a huge amount of earnings next week.

Speaker A

it was if it was passed if it was announced and passed a windfall tax even just out of Europe, these stocks would probably drop 15 to 20% as again it would wipe out a lot of the profits that

Speaker A

In fact, very quiet on earnings. Um, and not a huge amount of economic data.

Speaker A

All right, I have a bunch of charts I want to go through, but before we do that guys, I want to touch base. This show along with other shows here at Verified Investing would not be made possible without our sponsors. Rumble

Speaker A

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Speaker A

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Speaker A

All right, let's jump back into the charts and take a look here. Couple stocks on the radar. We'll get to Bitcoin in just a minute, but let's go through a couple of these stocks. I'm watching Apple closely. Apple yesterday

Speaker A

filled this gap. Look at the big gap here. and then another gap here. This big drop on the back. I believe that was earnings if I'm if I remember correctly.

Speaker A

Um but either way, the gap fill now signals that I am now interested in a swing trade short on Apple. I haven't taken a position yet, but I'm going to be eyeing this today. The iPhone, the new iPhone apparently is starting to

Speaker A

take orders, pre-ell, and the the amount of delay. So, it shows how much demand there is. It's slightly better than last year, but it's not overwhelming.

Speaker A

Probably because gas and diesel prices are so high and everyone's getting stretched, right? But the point is is that this move back up might have gotten a little extended. The chart is now signaling a short on Apple and I am

Speaker A

listening very closely to that chart. Netflix got downgraded today. I have a key level here. We're almost at this key level around 7150 or so. That is the first area of support. They got a downgrade today. I believe, and this was

Speaker A

kind of sad to see, but it is what it is. The analyst downgraded the company to a I believe it was like a $52 price target. So, it's not a good price target. They highlighted the second half of the year, their their quality of

Speaker A

content degrading, maybe not as being as strong, and lots of other factors out there, which listen, in all fairness, is is kind of true. I don't know how many of you guys have been on Netflix, but I I am struggling these days to find good

Speaker A

stuff to watch. Maybe there is some, maybe I just don't have the time to research it at this point. But either way, the downgrade is pushing the stock down. Do I like it as a swing trade here? No. But as a day trade, it is

Speaker A

peing my interest today. So Netflix is on the radar. Crowd Strike as a swing trade. I love this technical trend line up here. Doesn't mean it won't go a little bit higher, but we're starting to get into overbought scenarios on the

Speaker A

cyber security aspect of the AI trade. I'm looking for an eventual swing trade drop down to 192 to 188. Gap fill ascending trend line right there. We talked about Valero. Valero trading basically flat in the pre-market. Again, look at the rise just going back to

Speaker A

June. This stock has rallied a whopping, let's see here, 77% in just a few months. And again, you looked, if if you showed me this chart, I'd be like, "Oh, that's got to be like the latest hottest AI stock, right? I mean, they must have

Speaker A

technology that's going to cure cancer. No, actually, they probably have stuff that's causing cancer. But that's besides the point. The point is is that this stock has gotten way ahead of its skis, especially now that the political atmosphere is starting to look at who's

Speaker A

making so much money off of high gas prices and diesel prices, and the politicians will start attacking these players and talking about that windfall tax. And then also remember historically we've seen crack spreads get big and wide with them making lots of money and

Speaker A

then it shrinks back down. And so inevitably these stocks have boom and bust cycles much like cyclical players and they will have it as well. So I continue to like it. I am short Valero myself and I do think these will come in

Speaker A

heavily over the coming weeks and months. All right, couple other ones to talk about. We didn't talk about Bitcoin yet so let me talk about it. Then I got to get to my trading room as the market will be opening. Look at how Bitcoin

Speaker A

held the major support. Even with the clarity act basically done for the year, Bitcoin is starting to push back up and the tell was that it held this level.

Speaker A

This is still a bull flag on Bitcoin. I still remain bullish. In fact, in smart money uh crypto where I show my live account in on my of my crypto positions, I am long Bitcoin. We got long right

Speaker A

above 76,000 right here. I said, you know what? Let's buy it right at the level. Worst case, we stop out if it gets below and I lose a couple hundred bucks. But let's jump in here. And so far, it is working out beautifully. And

Speaker A

we're seeing crypto like Zcash, Hyperliquid. A lot of these cryptos are going up sharply. Although, I will say that I just shorted a little bit with Smart Money Crypto on Hyperlid, upper end of a parallel. If you're part of

Speaker A

that service, you see the position I took. All right, I got to get going here, guys. Happy Friday. I'll be back with the weekly wrap-up later today at 4:20 p.m. Wild stuff in the markets.

Speaker A

Hang on to your hats, folks. We're here to guide you at Verified Investing. You spend your time with us. We're going to make sure we give you the the the best the best stuff that we have is for you.

Speaker A

Thank you so much, guys. Have a great rest of your day. Take care.

Topics:Bank of Japaninterest ratesyen weaknessUS bond yieldsS&P 500 futurestriple witchingtechnical analysismarket volatilitydebt to GDPBitcoin

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