There's lots of talk about the yen carry trade, so we will take a stab at addressing the issue. The world of currencies and predicting the path of the U.S. Dollar Index (USD) is technically challenging. At times, the dollar COT data is very timely. In many markets, the smart money raises stakes gradually as an asset declines -- and many times, they act early. With the greenback, their timing has been quite good. The yen carry trade, which was blamed for the panic drawdown in Information Technology stocks, happens when investors borrow the yen at a low cost and use the proceeds to buy a higher-yielding or higher-returning asset (in this instance, Information Technology stocks). As long as the yen declines, rates in Japan remain low, and Information Technology rallies, money is made on both trades. The yen fell versus the USD from 12/28/23 until 7/10/24. During that period, Information Technology stocks ripped higher, especially semiconductors. The yen rallied from 7/10 until 8/5 and -- at the same time -- semis were smacked. Since 8/5, the yen has drifted lower while semis have ripped higher. The COT data became very bullish for the yen from May until July (as the currency was bottoming). Since the yen bottomed and then rallied quickly, the COT data has unwound just as quickly and is now bearish for the yen. If the smart money is right, that should be one less worry for stocks. While the carry trade has occurred before, usually it has involved other currencies. Finally, the correlation between the yen and the U.S. stock market is nonexistent -- and since 1979, it looks like an EKG. (Mark Arbeter, CMT)

Check Point Software Technologies Ltd. creates and markets internet security products for enterprises and high-end networks, internet service providers, small and medium-sized businesses, and consumers. The company's perimeter security products include virtual private network and firewall products, security management products, and ZoneAlarm security suites for consumers and small businesses. Check Point's revenue base consists of subscription and perpetual software licenses, product sales, subscription-based fees for updates, and maintenance and consulting fees. Incorporated in 1993, Check Point has a global workforce and maintains headquarters in Tel Aviv, Israel. About 57% of the company's revenue is derived from outside the Americas.

Insider buying tends to get more attention than insider selling. Indeed, Peter Lynch famously noted that 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.' Up until recently, 2024 was a very good year for equity investors, with all-time highs booked on a regular basis. So as insiders grew increasingly cautious over the past few months, it was easy to assume they were simply taking a little off the top. But about four weeks ago, the caution became more pronounced, and we noted in recent commentaries that 'insiders have increased their selling activity;' and then 'insiders continue to...cash in;' and then insider sentiment is 'deeply into bearish territory.' Finally, last week, we detailed that certain sell/buy ratios from Vickers Stock Research were at their most-bearish levels since February of 2023. So insider caution turned into a bearish stampede. More important (and keeping in mind the words of Peter Lynch) is the following: Are insiders starting to think that prices are again attractive? Not yet. Current insider-sentiment readings from Vickers remain very bearish for a third week, with the action on the NYSE especially bleak. Meanwhile, the Insider Index from Vickers now sits at its most-bearish reading since August of 2021. This will all turn eventually -- and we plan to call it out. But for now, playing defense remains the order of the day it seems. On a sector basis, selling by insiders last week was greatest in Information Technology, with shares valued at $114 million sold versus roughly $19 million bought. Buying outpaced selling in Communication Services. This week, analysts at Vickers highlighted insider transactions of interest at Appian Corp. (NGM: APPN) and The St. Joe Co. (NYSE: JOE)

The metals have taken it on the chin since July 16, with the SPDR Gold Shares ETF (GLD $218.40) falling over 5% in just a few days. The iShares Silver Trust ETF (SLV $25.40) has dropped over 11% since July 11 and is off 13% since its May 21 peak. SLV has retraced almost 50% of its sharp move higher from late February until its May 20 intraday high. The price action in GLD is particularly alarming as its recent breakout to all-time highs turned out to be false. Generally, that means a trip back to the lower part of the most-recent range, in this case to the $211/$212 region. The U.S. Dollar Index has rallied since July 16, but not by much, while Treasury yields have jumped a bit. We still believe that GLD will have another big run to the upside (as well as SLV), this after the current pause/consolidation is complete. The Commitment of Traders (COT) data is very bearish for both metals and has not improved since the metals started to correct. A 38.2% retracement for GLD lands right at the bottom of its recent range, while a 61.8% giveback targets $201. The rising 200-day exponential is at $204. SLV has support at $25, and after that at $24. The other metal that has seen a more dramatic decline is copper. Copper has been smashed, falling from $5.20 on May 20 to $4.08 early Thursday afternoon -- a 22% decline. It has retraced over 61.8% of its large rally from late October until May. But let's not forget that copper rose from $3.66 on February 9 to its recent $5.20 high, basically in a straight line. The COT data, which was bullish early this year, is now very bearish. (Mark Arbeter, CMT)