The Brown Earth Dog Is A Fire Breathing Dragon

The dragon dance is a customary way to celebrate the Chinese New Year.

We all know what dragons breathe-FIRE!

Furthermore, where there’s smoke, there’s fire.

Plus, as the element this year of the brown earth dog is water, bulls now have to hope its enough water to put out the fire, rather than just enough water to create steam.

Here are just a few of today’s fires:

Imposing tariffs on steel and copper-will make it more expensive to buy, and possibly start a trade war.

Chairman Powell-“No signs of wage inflation. By continuing to gradually raise interest rates over time, we’re trying to balance those two things and achieve inflation moving to target but also make sure the economy doesn’t overheat.”

Volatility on the rise-like throwing a match on a scarecrow made of straw.

Dollar, on the upward trajectory, changed course midday.

The tax cuts-has resulted in lots of corporate stock buybacks-but weak GDP will outweigh positive results.

Trouble in the White House with Sessions, Hicks, Jacobson, McMaster, and Kushner.

The Year of the Brown Earth Dog brings many warnings from several Chinese astrologers. I have written about these in earlier Daily posts.

Yesterday I asked, “Is this a good time for active investors to settle up and go to cash?” Today, I ask the same question, only with different answers.

At the sake of repetition, the biggest warnings are twofold.

First, the water element and the prediction of starting in October, a 5-year bear market.

Secondly, that President Trump is born the Year of the Fire Dog, hence, he could have a huge impact on world events that shake up the market.

Today, the dollar’s weakness, along with the pop in rates, is not exactly the inflationary setup I expected.

Rather, it reflects the fear that we saw in the rise of volatility and gold.

However, I had affirmation on both stagnation and/or stagflation today from 2 pretty smart men.