December 12, 2016
The following polling result was posted on December 7th, and absolutely confirms my belief that 98% of the geniuses on Wall Street STILL don’t get it…that they still DON’T realize that the stock market is in the process of lifting off on the upside…
This poll, by a highly respected organization, was most likely taken when the S & P 500 was trading around the 2200 mark…which would mean the “consensus among all analysts” would be a target…for the entirety of 2017…of about 2280…which, as you will note below, is just about where we ALREADY are…and 2017 hasn’t even gotten here yet…which I believe is absolutely, totally, incredibly absurd…
I SEE THE S&P EASILY REACHING THE 2450-2500 AREA, AT LEAST, AND PROBABLY LONG BEFORE WE GET TO THE END OF 2017.
And if you think the Fed is just going to sit there and gradually “inch” rates higher while stocks AND the economy take off, I think you need to apply for one of those Wall Street analyst jobs…because those same boobs ARE still doubting the inherent strength of our economy AND still wondering if this Trump thing is real…if the idea of “Trillion Dollar spending to stimulate the economy” will actually be enacted…which is just mind boggling to me.
As I keep repeating, Trump and Congress (Republicans and Democrats alike) ARE going to go nuts on the spending front…with every congressional hand grabbing for the pie…and there WILL be massive spending, and there WILL be massive construction, and there WILL be growth, and there WILL be inflation…and THERE WILL BE RAMPED UP BORROWING OF FUNDS TO DO ALL THIS…and INTEREST RATES WILL BE GOING UP FASTER AND BIGGER THAN ANYBODY (THE EURODOLLAR MARKET INCLUDED) HAS EVEN BEGUN TO EXPECT.
I CONTINUE TO VIGOROUSLY RECOMMEND BUYING PUTS IN EURODOLLARS…
And just a reminder…When interest rates are going up, Eurodollars go DOWN.
I certainly don’t know what is going to come out of Wednesday’s Fed meeting announcement but my guess is they will certainly acknowledge that the economy appears to be on stronger and stronger footing…and it IS possible there could be some inference their statement that rates might be going up faster than the markets appear to be anticipating (as several governors have already stated)…which COULD lead to some sharp selling in Eurodollars…so I continue to recommend buying these September, 2017, puts ahead of the meeting.
On a related note, I don’t think the stock market really “cares” what the Fed does right now…If the Fed sounds “hawkish”, all the yakheads will think, “Oh no! Another reason to be CAUTIOUS about buying equities”, but the market will TOTALLY ignore the Fed…and those mushbrains…and just KEEP GOING…quite possibly even accelerating with that last bit of 2016 news out of the way.
ON the other hand, as I’ve said before…If the Stock Market does keep ripping, at some level, you’d better believe the Fed WILL be reacting to it…and it WON’T be by just “gradually” lifting rates.
Give me a call if you want to do something with this…I DON’T think this thing is just going to lay here at 10 month lows for much longer…at all.
If you already own this, adding some with another 3 months of time certainly makes sense…
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The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Eurodollars