is always light and when you consider the aspect that trading volumes have declined in recent years, it would be foolish to enter the market. One deep pocket could send a share up or down which brings to mind an old Wall Street proverb:
"The market can stay irrational longer than you can stay solvent."
With that said there are a few points worth paying attention too as the market will begin in earnest around the third or fourth of January.
A strong dollar will cause harm to US companies. I call to mind when Oracle released earnings a week ago. They said, "The strong dollar hurt the bottom line." Dear reader, the dollar was 93-cents during their reporting period. It is now at 103.
King $Dollar
It will be helpful for US consumers, but it will lower our exports and increase our imports. This will add to our deficit. It will be a drag on GDP. This will make a headwind for gold. However, I like to note that on the 27th of December at 2:30 AM, there was a serious buyer of gold as 59,000 contracts were bought. This is a very rare occurrence. In addition, corporate America won't be manipulating their stock in 2017 because corporate debt is 45% of GDP. They don't have wiggle room to do buyback and service their previous debt. The market is in over-bought condition as the PE ratio in high at 28.
Not Only That...
According to the St. Louis Fed, public debt is at an all-time high while the velocity of money(M2)is at an all-time low. With Trump coming, the Fed said that our government in general, runs more deficits than surpluses. Our monetary base has exploded and yet, Americans only save less than 5% of earnings while the Chinese save 35% of their earnings.
All of the above is food for thought as we should take some time to reflect, give thanks and enjoy the holidays. Peace.
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