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There’s only one fundamental driving the markets right now

U.S. stocks (^DJI^GSPC^IXIC^RUT) continue to roll over today, as the markets digest a less-than-stellar ADP payrolls report. There’s also a spate of other economic data today, none of which is particularly important. Nevertheless, the headlines after the bell will have arbitrarily assigned something “newsy” to today’s market action.

The fact is, none of this really matters. Neither do earnings. There’s only one fundamental at play, and that’s liquidity—or the lack of it.

The Bank of Japan was the last great hope for another quantitative easing–induced buying spree that would have rocketed global risk markets higher. When BOJ President Kuroda announced that “helicopter money” was officially illegal, investors recoiled and retrenched—hence the jaw-dropping strengthening of the Yen.

This also accounts for the recent slide in the U.S. dollar, as safe haven flows are simply favoring the least dirty shirt in the laundry basket—which in this case is the Yen.

The good news is that on a technical basis, the volatility in currencies is subsiding, and it’s quite possible we have a reversal underway. Whether or not this translates into putting a bid on U.S. equities remains to be seen.

The reaction to Friday’s big jobs report will be key. Notice I didn’t say that the report itself is important. Big money will simply run with the headline numbers to add to its positions. The market will go up and down (not necessarily in that order), and the close of the S&P 500 will be the only number that matters.

It’s a bit early to handicap the key levels, but 2040 to 2080 in the S&P 500 is a particularly relevant trading range to watch. If the lower end goes, fasten your seat belts.

Good trading.