The raised cash went into index investing, such as buying the small dip in SPY and QQQ.
The Euro/US$ continued showing weakness... and will continue to do so.
The NQ8 is still sitting just above negative territory, while the small caps are weakening (but still show a positive MF).
Oil is still in an uptrend
Conclusions:
Based on the above figures, the Fed's latest move will continue to push real rates higher, helping the US$ but also attracting foreign money into US assets, especially the large caps.
This will continue until US Treasuries once again offer attractive rates compared with S&P500 dividends and stock buyback returns. This could take another 12 months.
Corporate and income tax cuts that still need to go through Congress are another factor.
The small caps have in recent weeks outperformed the large caps because of anticipation regarding the expected boost of this tax deal. The idea is that those earnings will spend this cash in the economy (spend more.) Since the small caps are more flexible, they will profit quicker from this newly available spending power.
This might or might not come true. What we know is that the PE ratio of small caps is very high (see study link below) and that they do rely on debt for their financing. Higher rates will weigh on the ability of small caps to increase their bottom line, while tax cuts will not help those that produce zero earnings.
http://www.marketwatch.com/story/her...tio-2017-08-18
I still believe shorting the small caps via six-month puts when the IWM/SPY ratio reaches exuberance is a good way to trade this market.
As for the NQ8, it is mostly influenced by AAPL negativity regarding the latest iPhone sales. iPhone X will be released in November. Hence, buying weakness in QQQ could be interesting ahead of November.
