Good Morning,

This is one of those weeks where the market looks calm on the surface, noisy in the headlines, and structurally fragile underneath.

There are a dozen stories competing for attention right now. Only four actually matter for traders. These are the ones we’ll be focused on this morning.

1. Japan Is the Center of the Market

The yen’s sudden surge, NY Fed rate checks, and increasingly explicit language from Tokyo are not a coincidence. This is pre-intervention choreography. When the yen moves fast, it hits global risk through funding channels, not sentiment. If coordination comes, markets stabilize. If it doesn’t, forced unwinds follow.

2. Massive Systematic Longs and Fragile Downside

CTAs, risk parity, and volatility control strategies remain heavily long while momentum has quietly deteriorated since October. BofA estimates that a 3–5% drawdown could trigger mechanical selling of over $200 billion. This is downside convexity, and it’s a structural risk that traders cannot ignore this week.

3. Gold and Silver Are Sending a Signal

Gold above $5,000 and silver near $110 are not panic trades. They are repricing sovereign risk, policy uncertainty, and monetary credibility. Hard assets leading while tech lags is a regime signal, not a headline.

4. Fed Week Is About Plumbing, Not Rates

The Fed will hold. That’s not the story. Treasury issuance, repo conditions, settlement pressure, and liquidity velocity are. You can already see stress in insurance stocks, regional banks, and pure liquidity beta assets.

This is not a week for complacency or heroism. Support is likely coming, but potholes exist before the fix fully takes hold.

I’ll be breaking all of this down live at 8:45 am ET on Market Masters, walking through what matters, what doesn’t, and how to stay positioned without getting caught leaning the wrong way.

Join me this morning, and let’s get ahead of it.

See you shortly,

Garrett Baldwin