[Market Outlook] The Exponentially Larger Chicken Little

[newsletter.png] The Exponentially Larger Chicken Little January 8th, 2017 Keith Schneider CEO, MarketGauge.com [outlook20170108.jpg] The results for the first week of 2017 in US equites were impressive after a wobbly end of 2016. The S&P500 ended up +1.66% with NASDQ 100 up +2.86%. A far cry from the inverse action one year ago, For those market gurus calling for a major top, crash or zombie apocalypse, it all reminds me of the fable “Chicken Little.” Since this is the year of the Chicken per Chinese folklore, it seems appropriate to examine whether there is some market wisdom lurking within that fable. Chicken Little panicked when a seed fell on him. He mistakenly concluded that the sky was falling. A classic case of well-intentioned but undue paranoia. It ultimately got his friends he convinced to join him on a road trip to inform the world of his “discovery”, eaten by a tricky fox. Since the fable was written, things have changed. First, the latest big data algo found that chickens are now twice the size they used to be. Secondly, they are larger still because they use the internet to spread misguided or wrong information. The takeaway for 2017: Don’t follow gurus like Chicken Little. It can get you killed. Get the facts, be objective (no personal politics), and watch the tape because most likely, large declines will not come from where the crowd is looking. Most importantly, in an environment where fresh data driven by presidential tweets requires quick stepping, maintain flexibility and adaptability. Ok, so are the bearish market gurus setting up their true believers to get eaten by this strong persistent bull? For the moment, the stock market says yes. Sentiment indicators such as the VIX continue to signal a total lack of fear. The market approaches irrational exuberance but hasn’t gotten there yet. Key relationships such stocks versus utilities are still in gear. One of the best recession indicators most correlated to massive selloffs, the 12-month moving average of unemployment data is in excellent shape. A few things to note on the more cautionary side is that Gold has improved versus stocks and Junk Yield debt has slipped versus the safety of US Bonds. Construction as measured by Gold /Wood also weakened. [Click here to go to this week's video.] [twitter.png]Get more - follow us on Twitter! [@marketgauge] and [@marketminute] To stop receiving this go [here.] | Got Questions? (Office hours 9-5 ET (New York time)) Email: [info@marketgauge.com] Live Chat: Go to bottom right corner of our [home page]. Call: 888-241-3060 or 973-729-0485 "Market Intelligence at a Glance + Tools For Serious Traders" [Tap here to manage your email subscriptions or stop receiving this email.] The information provided by us is for educational and informational purposes only. This is not intended to be individualized investment management. If you require investment management, please contact your investment adviser or our affiliated investment adviser, Market Gauge Asset Management, LLC, at [www.mgamllc.com] MarketGauge.com 70 Sparta Ave, Suite 203 Sparta, New Jersey 07871 United States (888) 241-3060