Janet Takes the Nuclear Option

Janet, Janet, Janet.

Why are you trying to make my life so difficult?

Here I was expecting the third interest rate rise this year, and what do you do?

You announce a schedule for the unloading of your Treasury bond hoard instead, some $4 trillion worth.

At $6 billion a month, that works out to a mere $200 million a day in Treasury bond sales.

And here’s my beef with you.

The sale of $4 trillion in Treasury bonds has a MUCH bigger impact on the economy and the stock market than a measly 25 basis point interest rate raise.

You remember me, of course.

I was the guy who always left the polished apples on your desk.

Yes, I was the errant student that I was always turning in papers late, coming up with wild, impossible, economic theories, and sitting in the front row of your classes and peppering you with an endless barrage of questions.

But really? Is this fair?

I have enough on my hands to deal with, with endless hack attacks, wondering if it’s the Chinese or the Russians who are going to steal my identity next, and coping with a global warming induced Armageddon that is happening ahead of schedule.

I now I have this damn iPhone operating system to figure out, iOS 11!

I don’t think markets have figured this out yet, but THIS CHANGES EVERYTHING.

If you press the bond market just a LITTLE BIT, and nudge market rates up, the message to the markets will be loud and clear.

The ten-year Treasury yield has already ratcheted back up from 2.02% to 2.26%.

Stick a fork in the bond bubble (TLT) and you’ll find its done. Same for stocks (SPY).

Higher interest rates mean that the bear market in the US dollar (UUP) is over. The Japanese yen (FXY), the Euro (FXE), the Aussie (FXA ), and the Loonie (FXC) are all toast.

Higher interest rates also will put the new bull market in gold (GLD) on hold, as it will have more yield competition.

In other words, your one mill will take every major market trend this year and TURN THEM ON THEIR HEADS.

Maybe I’m just getting cautious in my old age. But markets have been screaming “overbought” for weeks.

The grand finale was my own Mad Hedge Market Timing Index, which peaked at a stratospheric 81 a couple days ago.

I did see some of this coming.

That why I sold short Apple (AAPL ) shares last week, right when everyone was going gaga over the new iPhone lunch.

Oops! It turns out that the new watch doesn’t work. The shares have since fallen nearly 10%.

I think this move bodes ill for ALL of the FANG’s, which may well flat line for the rest of 2017.

Trade Alerts.

Yes, I have to mention the Trade Alerts.

After clocking 24 consecutive winners, eeveryonesince June 23, I finally got hit with a stop loss.

That had me bailing out of a bullish position in Barrick Gold (ABX ) for a miniscule loss, thanks to the above-mentioned Fed surprise. (ABX) is the world’s largest gold miner.

Still, that leaves my trailing 12-month performance at a welcome 61.33%, and my eight-year figure at a record breaking 265.05%, giving me an average annualized 34.20%.

The final week of Q3 2017 will be light on the data front.

On Monday, September 25 at 8:30 AM EST we get the September NAHBChicago Fed National Activity Index, a weighted average of 85 national economic indicators.

On Tuesday, September 26 at 9:00 AM EST we learn the July S&P Case Shiller Home Price Index. Think hot, hot, hot. I just had my San Francisco house appraised and it is up a ballistic 10% in a year.

On Wednesday, September 27, at 8:30 AM EST we get the AugustDurable Goods Orders, which reflect the new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods.

Thursday, September 28 at 8:30 AM EST we learn the Weekly Jobless Claims, which will most likely mirror last week’s gigantic increase.

At 8:00 AM we also get another read on Q2 US GDP. The last one had Q2 at a hot 3.0%.

On Friday, September 29 at 9:45 AM we receive the Chicago PMI, with readings above 50% indicating an expanding business sector.

Wrapping up the week at 1:00 PM is the Baker-Hughes Rig Count, which delivered a rare fall last week.

This being the last day of the quarter, watch for the usual fun and games going into the close so your mutual funds can artificially overvalue your holdings.

As for me, with snow already falling in the High Sierras, it looks like this will be the last weekend of summer.

With temperatures expected in the 80’s, you can find me sipping a pitcher of mojitos poolside at my local club.

Will ladies' swimsuits continue to grow smaller next year?

It seems impossible.

Shopping for Some New Real Estate