Gauging fear to current cycle.

The chart above is showing how a low fear index allows for an easy dollar environment for your investments. Right now we have elevated fear that leads to a choppier environment.

What are these fears? 1) The election, 2) Unceasing Wars costs country approximately $200 Billion, 3) rampant illegal immigration costing taxpayers between $150 – 200 Billion, 4) rapid escalation of government debt, 5) 20% inflation over 4 years. Even though the Fed lowered interest rates by 50 Bps, the market believes these problems will pressure a return to inflation. The bond market, the US Dollar and silver are moving higher. These 3 items will pressure stocks, especially small cap stocks – bio-techs and smaller banks. Many larger banks took on huge short positions on silver and now they have a big decision to make as silver stretches higher. I would continue to watch if there is a rotation into oversold energy and commodities. Will 5% on the 10 Year Treasury be back? What drives stocks higher are a declining dollar, low interest rates and low inflation. Stay informed as changes happen rapidly.

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