There is a volatility virus in the present markets as good news and bad news are amplified beyond the expected trading ranges leading to manic depressions. Today and perhaps the entire week is euphoric after the blues from Friday and Monday, writes Bob Savage Wednesday.

The 1995 Terry Gilliam film 12 Monkeys may be the right way to think about today.

We are in a new world traveling back in time to fix the inevitable haunted by our own demise. The film is also intended to be a study of people's declining ability to communicate in modern civilization due to the interference of technology – something to which we can all relate with in 2018.

But today is 12/12 – Doble Doce day – where anything is possible if you think beyond the linear progression of time and place.

The headlines are a mix of good and bad news with the U.S./China trade talk hopes ongoing after a Trump interview suggested he may intervene for the Huawei CFO while the UK PM Theresa May likely faces a leadership challenge and the risk of a new election mixes badly with the rising fear of a no-deal Brexit.

The best way to monitor the madness of the moment isn’t in watching the S&P CBOE Volatility Index (VIX) or in tracking the U.S. dollar (USD) but rather looking at the British pound/Japanese yen (GBP/JPY) trend – where JPY reflects rates, trade worries and global growth and GBP reflects the carry trade, geopolitical fears and the BOE policy risks.

The Guardian: Pound hits 20-month low against U.S. dollar after Brexit vote postponed.

This is a market that is going lower and seems even with the 0.85% bounce today to be set up for more pain.

View TrackResearch.com, the global marketplace for stock, commodity and macro ideas here