Rally In The Yen Exacerbating Market Weakness

If you're looking for the real culprit behind today's weakness, I would point you in the direction of the Yen. The Yen is rallying sharply today, which always causes concern for the yen carry-trade unwind.

The selling pressure is fairly intense, with the ARMS Index hitting 2.37 earlier. The put/call ratios and volatility indexes are spiking in similar fashion.

Volume is light today, with many traders out on vacation. This means many desks have the "B" teams manning the desks. I don't like to draw too many conclusions from the last week in August.

Next week, volume should pick up noticeably on the exchanges.