CLIENT TALKING POINTS
Japan
ISM accelerates, Dollar Rallies, Yen Weakens = Nikkei +2.5% to start 2017, but signals immediate-term TRADE overbought within our bullish intermediate-term TREND view; we currently have both USA and Japan in Quad 2
Oil
Wild ride yesterday, but I wouldn’t stress about it unless Oil’s Volatility (OVX) can sustain a level higher than 34-35; WTI’s risk range continues to narrow (that’s bullish for price, provided that the volatility regime change continues to be bearish) = $51.56-54.56/barrel; Nat Gas signaling immediate-term oversold at $3.28 too
Gold
Unlike Oil, on an intermediate-term TREND duration continues to signal a series of lower-highs with immediate-term downside to $1121/oz (it’s signaling overbought again today, so I’d short both Gold and Long-term US Treasuries here)
TOP 5 LONGS: USD (or UUP in ETF terms), GBP/EUR, XOP, QQQ and Transports (IYT)
TOP 3 SHORTS: Gold (GLD), EUR/USD (FXE), Long-term Treasuries (TLT)
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/3/17 | 26% | 23% | 10% | 11% | 1% | 29% |
| 1/4/17 | 31% | 21% | 10% | 11% | 0% | 27% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/3/17 | 26% | 70% | 30% | 33% | 3% | 88% |
| 1/4/17 | 31% | 64% | 30% | 33% | 0% | 82% |
THREE FOR THE ROAD
TWEET OF THE DAY
Repeat After Me: Valuation Is Not a Catalyst!
QUOTE OF THE DAY
"When the weather changes, nobody believes the laws of physics have changed. Similarly, I don't believe that when the stock market goes into terrible gyrations its rules have changed."
–Benoit Mandelbrot
STAT OF THE DAY
Total US Domestic Debt is $47.0 trillion:
-Household debt: $14.6 trillion
-Non-Financial business debt: $13.4 trillion
-Government debt: $19.0 trillion