Fly on WallStreet

Apparently, China is not too happy about the Democrats taking control of Congress. As you know, the Dems have been very vocal about the massive U.S.-China trade deficit and China's manipulated currency. For the most part, the GOP has been a big friend to Chinese business and have pretty much looked the other way, in regards to China pegging the yuan to the dollar.

However, now that the Democrats have taken power in Congress, I suspect our policy may change. Already, China announced they would be "diversifying" their currency holdings. This means, instead of them buying dollars, they will buy euro's, gold, silver and other market currencies.

Considering China currently own more than 1 trillion dollars, I'd say this is big news. As a result, the dollar has been on a decline, while gold, silver, euros and oil (dollar denominated commodity) have gone up.

Bottom line: The way I am playing this development, as always, is buying the commodity or currency outright. Therefore, I will be adding to my GLD (Gold), USO (Oil) and FXE (Euro trust) positions. If you want to own silver, SLV is the way to go. I fucking hate silver-- way overrated.

As for today's trading:

I sense the dip buyers will make an attempt to rally the market today. Already, I am seeing sharp reversals in many Semiconductor stocks. However, I do believe the market is overdue a minor pullback and feel buying today may be a mistake. We shall see.

NOTE: I am combing thru many stocks, trying to identify the ones that may benefit from a Democratic Congress. So far, I like the following: CCC, AVR, VSE, PMFG, ANDE and ITT. More to come.