Hi Everyone,

It seems like that our government has decided to continue trash or as some people say burn the dollar with the continued irresponsible monetary policy. As it has been the case for at least 18 months, when ever the dollar burns, the US stock market is up.

How much longer can this continue?

The market has been behaving irrationally for some time now, actually it has been doing that much longer than I thought. So will this continue? In the mid to longer term, say more than three months, I am certain that this market can not be sustained as very few of the economic statistics support it. It could go sideways for a while. On the other hand, since interest rates are practically zero, the money has to go somewhere, but the longer this goes on, the more violent the correction will be. I have been taking profits for my clients and started to initiate some purchases in short ETF’s protected with stop losses.

The dollar might still has more correcting on the down side to do especially against currencies of countries in Asia, but less against the European countries. No matter what, each time the dollar drops one percent, the prices of the exports into the US become that much more expensive, and that will hurt their economies. Overall, I am more bullish on the dollar than many people.

Look at your portfolio and realize some gains if you have some, also considering the potential tax law changes next year, but that is for another day.

As always, please feel free to comment.

Cheers,

Patrick