X
Tired?
Unfocused?
Off your game?

Read our free Dr K report on how to optimize your mind and body so you can boost your focus when trading the markets.
YES, SEND ME THE REPORT !
NO, I'M NOT INTERESTED
Your email will always remain private.

Market Lab Report - Premarket Pulse 1/3/17

Published : January 3 2017 at 9:19 ET

Major averages closed lower to end the year on higher but below average holiday volume. As we have written, at no time in history has this QE bubble ever deflated gently. This seems to be the market's biggest headwind for 2017. The US Federal Reserve is now on course to hike potentially three more times this year. After central banks have printed themselves into a monetary corner, the US Fed realizes they better start raising rates or they will have no "fuel" to resuscitate the economy from the next recession which could turn out to be far more serious.

Since 1929, every bubble that burst due to Fed rate hikes came at a time when interest rates were significantly higher. Thus, the Fed was able to lower rates to spark a recovery. This time, rates are still near historically low levels, which makes this time different. Indeed, over the last two years, rates have never been lower in the history of the United States.

China's December Caixin manufacturing PMI came in at 51.9. This was up from 50.9 a month ago, and the strongest level since early 2013. However, Chinese citizens continue to move currency outside of China beyond the maximum annual limit of US$50,000. To get around this maximum, an increasing number of Chinese have been using bitcoin to convert their yuan for quick transfer via cyberspace into accounts outside of China. Indeed, bitcoin broke through $1,000 on the first day of this year as it set new market capitalization highs above $15 billion.

Oil prices moved sharply higher on Tuesday on hopes OPEC’s deal to cut production that set in on Sunday will help stabilize the market in 2017. The jump was fueled in part by expectations members of OPEC and other major producers will abide by an agreement to curb output. The output quotas kicked in on Jan. 1. Market participants are now waiting to see if both OPEC and non-OPEC producers will stick to their part of the deal.


This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2017 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.