Sunday, January 15, 2017

NDD weekly indicators

New Deal Demoncrat - weekly indicators all look great. I'll take issue with this:

Over the last several weeks the "Trump election effect" in interest rates and the US$ have abated, apparently because traders are beginning to doubt that a significant stimulus will actually be enacted.

No, that's not how it works.

Rather, the "Trump effect" was an overlay of new volume that all sent markets in one direction. Once that new volume is worked through, markets will go back to trending toward the equilibrium.

Doubt over policy may figure in, but more along the lines of "I doubt that the outlook for X has changed so much just because there's a different guy in the White House than we had 2 months ago."

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