The Real Root Cause & Effect: Global QE - FED will Retain STATUS QUO

Market Driver for Stocks Record High - What Happens then when Central Banks Starts Unwinding their Balance Sheet & Interest Rates goes up?

As the saying goes, we'll cross the bridge when it gets there. For now, the #DOW have made incremental price corrections even as much as a triple digit decline at 23251. Meanwhile, the continuing discussion for the new FED chair to be announce on Thursday have kept speculation near to certainty that Powell would fill the chairmanship while Taylor may eventually be vice chair. We in turn would not join these discussion and focus mainly on price action relative to what is
expected report of Friday's NFP report.

DOW Overlay NASDAQ

Interest rates hike are again being priced in the market but the relative gains with CABLE have provided some traction of resistance for its advance. Although, its already a given fact that the outcome of the FED chair would still make the FED committee retain its status quo on rate hikes and inflation. As global central banks have dominated the financial market relatively for quite sometime when it comes with rates and monetary policies in place. A far cry from previous years where interventions were seen separately done without forward guidance then.

This is on top of other disruptions facing the market coming from Mueller's investigation that involves Russia's assumed role on the 2016 US elections. It is front and center as of late but would eventually be overshadowed once the announcement is made.

Nonetheless, the narrative increases beating earnings expectations have propelled NASDAQ to record levels at 6737.75 while the DOW is now nearing it previous high of 23485 at the current price of 23454 to this writing. Until the week's reports and data draws closer, we remain on course and stand firm as there only two months remaining for the last quarter of the year 2017. No further fresh or new stock position trades with the few exceptions of what we already have on the books including the ETFs which are well positioned for some time.

FX trades are kept well within a balanced trade positions favorable towards a USD gradual rise with a few carry trade & cross trading correlation between the CABLE, Swiss Franc and Japanese Yen related trades. Thus maintaining the right liquidity level compared with equities heading towards the end of the quarter trading 2017.  

#USD Adjustment Provides Initial CCY Relief

The fact that the #FED has finally came through with the much expected 25 basis point rate hike and have given their forward guidance on the next two rate increases have given Asian markets a relief. The recent decline of the #USD - DXY retreated mid-way through the 100 support levels likewise gave its foreign currency counter-parts a boost including the #EURO and #CABLE.

Note: Off-shore investments may look more attractive to investors, with emerging markets benefiting from a weaker dollar as price adjustments are made, which in fact is attractive for the Euro at this time. Especially with the encouraging comments made by ECB Mario Draghi in his latest press conference.

European majors such as the #EURUSD have risen above the 1.0700 while #GBPUSD stayed at the lower band of the established trend trading at 1.2273 levels. While the rest of the Asian currencies have made their respective exchange rate adjustments. The confirmation by the FED's rate increase have already been priced in the market for sometime leaving enough room for the lower adjustment to be made even before the day of the Fed's announcement.

'Moving forward, we do expect a comeback of volatility as the USD, and the precious metals including the oil markets would be in the limelight. Meanwhile, the US Stock Markets would experience a wider band of trading price range as it goes through the same level of price adjustments coming into the 2nd quarter of the year.' 

#USD & #US_Equities: Status-Quo Dominance Remains After Turbulent Flow in Markets (2016)

Nearing the end of the 4th quarter trading year; where Major Stock Indices from the #DOW, #SP500 #NASDQ to the #RUSSELL 2000 are at their all time best levels together with higher Bond yields. The US Dollar is higher; measured by the US Dollar Index-DXY at its 14 year levels marking a 103.56 bp high last seen since 2003 entering the new year in 2017. What's 'Behind the Rally, Extension and Range Objective' can best be summarized as exceptional trading times.

After a turbulent flow of prices during the year, where we have experienced price swings in both directions; the USD and US Stocks remains its 'Status-Quo' and have yet again, proven their dominance in the global financial markets.

Foreign couterpart of the USD has been battered in a directional trend lower, while US crude Oil prices are in a recovery which traded near a USD54.50/bbl price level, due to the production cut agreement led by OPEC and Non-member countries. Meanwhile, Gold had made a slight price recovery but then again moved lower that traded @1132.65 as a result of a stronger USD as a whole after the Federal Reserve came to light that stated a faster rate increase in the 2017 year to come.

Market In a Nutshell: A lot of fundamentally motivated price action in the market has occured this year, especially at the beginning of January 2016 alone that stretched as far into the two (2) quarter trading that saw a lot of market volatility in stocks. With a temporary market price range that started in April and July up until post US election day that started to build a momentum to move higher to this date.

Declassified - Inclusion in the Summary Position for the 4th quarter ending of 2016.

Revisiting Trade Position: Tracking the USD Index with the UUP DB Fund 

TSOT - Market Insight & Info: Premium
How the USD Gained Back its Mojo! Taking Advantage of Knowing Its Direction Where it came from and heading to.

HAVE A GREAT SEASON'S HOLIDAYS TO ALL!