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Lost Faith of a New Economy - Trading Notes
- Apr 3, 2017
- 1 min read
On the economy and the dichotomy between expectations and reality.
On FX
On Sentiment
On Yield Analysis
On Energy
On Sector Rotation
On Stocks I'm Buying
Bottom Line: Post-election sentiment has declined somewhat as investors await improving economic conditions and evidence that the Trump Administration can tame the Washington beast. Yield spreads are at levels usually seen before a market correction. We would definitely like to see the Financials as well as the Small Caps resume their upward trend to give us confidence in the market. From the S&P 500 daily chart we could see additional 6% to 8% declines from here if we fail to press higher. That said, one will face career risk if deployed in cash for too long. For our new asset purchases we are deploying slowly and keeping our stops tight. It continues to be our belief that the market will suffer a correction at some point in the first half of this year. That said, we believe it will represent a buying opportunity as recessionary and bear market outcomes are low in our opinion. Good Trading Joseph S. Kalinowski, CFA
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