It is all about Japan.

The Yen has been weak for quite awhile, so big money players were doing the "carry trade." That's where they borrow Yen, because when they pay it back later, they will make a profit if the Yen continues to weaken, and they use that money to buy stocks.

Basically, buying stocks on margin, but borrowing in Yen instead of US Dollars. This increses the profit -- IF the Yen continues getting weaker.

But ...

Suddenly, Japan increased their interest rate (from zero), which makes the Yen more valuable, not less. This has made the Yen skyrocket, relatative to where it has been.

This means that the big money that was short Yen are now on the wrong side of that trade. So, they have to unwind their positions by selling stock, so they can pay off their loans denominated in Yen, which is now going against them.

But it happened when the stock markets in the US were closed, which means they are panicking because they can't really sell just yet. So, they are hedging against that by selling futures, which are trading, but are not liquid during this time of the day.

That is leading to panic selling in the futures market. When the stock market officially opens at 9:30 am ET, stocks will be down huge, and there will be massive losses at the open.

Will be interesting to see if the market can rally, or if we go down another 1,000 points on the Nasdaq.

Glad I'm not long.

Bitcoin also getting smoked.

Crazy day, and the day hasn't really started -- yet.

Keep in mind, though, that when things get extreme, the markets have a tendency to reverse strongly and go the other way.

We shall see.