Is 2016 Year of Surprises

By Lawrence

Wha, wha, what!!??What a way for the year to start. In Asia, China acted decisively to devalue its currency and then speculators panic selling stocks in response. In Europe, EU looking to establish its own army while talks of Britain leaving EU getting a lot of attention. In America, US dollar continues to strengthen and Canadian dollar just made decade long new low against the US dollar. As if the world has chosen this year to make drastic changes in everything.

Is it all unexpected though that we are getting all these so-called news shocks within a week? I don’t think so.

All the events mentioned above have been developing since last quarter of 2015 if not earlier. The holiday season simply delayed them all and aligned them to happen right after New Year. Some people already blaming this year for being an unlucky year. Well, I am not sure if luck has anything to do with this. But I know for sure that looking at things this way does not help in resolving the matters on hand.

Case in point – the stock market selloff happening this week. Subscribers to my newsletter all know that I am looking for a selloff and that the target price level is now reached today after Non-Farm Payroll report. It is not that difficult to tell a correction is going to happen. It is the timing and magnitude of the drop that caught people by surprise but they shouldn’t be. All signs are on the wall.

Similar things can be said about Canadian dollar. The crushing of crude oil has killed the economy of the oil producing provinces within the country. That in turn affecting the other provinces. The Canadian dollar getting weaker is just a matter of time.

Media, however, cannot tell people that everything is expected. The need of ever increasing readership means exaggeration is part of their job. No wonder we got all these headlines that this week is the worst ever first week for the US stock market in history.

Keep calm and carry on.

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Comments
  • smilingsynic January 8, 2016 at 8:46 pm

    Measured move over the last two days took us to target of 1912.75 (March ES), which was reached at the very end of today’s bull flag.

    Will we tag last year’s low next week? Whatever happens, I am doing some work over the weekend so I can trade all day Monday. It should be fun.

    • Lawrence January 9, 2016 at 1:23 pm

      What happen on Monday will be critical for short term stability in world stock markets.

  • dbauer January 11, 2016 at 9:11 pm

    Fund buying the last six out of 7 trading days at the last hour is similar to other buy points the last few years. Flushing selling was consistent from dec 12 to dec 23

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