Submitted by Michael Shedlock via MishTalk.com,
As we head into 2017, how should one be positioned? Let’s explore that idea with a trio of contrarian indicators.
US Treasuries?
The one idea most widely agreed upon is that Trump will spur inflation and treasuries are the last place to be.
This headline says it all.
Interesting day...
Bonds & Bullion now outpacing stocks post-Fed... (and bank stocks are down 1.6% post-fed)
The biggest issue in the financial system… the issue that CNBC is completely avoiding… and 99% of professionals are ignoring is the US DOLLAR.
The US Dollar has ripped to 103.
This is a truly MASSIVE problem.
The Chinese Yuan is linked to the US Dollar. With the US Dollar at these levels China has rapidly entered a financial crisis.
In the last month, China has:
1) Burned through over $70 billion defending the Yuan.
2) Had to halt trading in its multi-TRILLION dollar bond market.
Markets are trading off a bit here, as Dow 20,000 proves to be wonderfully elusive. Since everyone expected we'd reach 20k by New Year's, we'll probably never reach it at all.
Heading into 2017, it's important to formulate a gameplan and prepare for any headwinds that might pose a problem for the stability of markets -- else you're just shooting in the dark -- like morons.
Here are some things to pay attention to in 2017.
For 10 straight days, progonosticators have promised that the Dow Jones Industrial Average will break gloriously above 20,000 for the first time in history, proving how great the economy must be (or will be) and leading investors to the next secular bull leg of this miracle of wall street.
So far it hasn't happened... (Dow +11.75% post-Trump)
But halfway around the world, Chinese fears (of capital controls and devaluation) have sparked an exodus into alternative currencies - most notably Bitcoin as it soars towards $1000. (BTC +42% post-Trump)