As of a couple of minutes ago the FED has announced that they will pauze the interest rates and not hike any further. Since rising interest rates seems bearish for markets, a pauze is often a much more bearish signal.
As seen on the lower chart, once the FED pauzes the hiking cycle ('flat mountain top'), it has often signaled a stock market crash in the not so distant future.
With the most recent pauze, one would be cautious for the future at the very least.
Do you think a stock market crash is coming? Share your thoughts🙏
Mate, you're 100% correct, I've been saying this since I started trading in 2010. Still it seems the markets have not caught on to this fact. It's a pretty simple formula really.
Fed pauses/cuts only occur due to economic danger.
Economic danger = volatility in markets.
I don't understand why people still don't understand this considering how obvious it is from looking at FEDFUNDS vs. SPX.
JoeChampion
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Great insight mate!
InkyGrip
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I agree SPX will down
JB7oh2
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The average is 11 months after a pause most likely after the election
steelerflans47112
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nope, no crash, some recessionary worries for a pull back q3 until "stable inflation" and decent corp earnings return. spx floor 4000.
204f527996864c37bf99691291ae25
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Of course it's going to crash. You need to be a complete retard to not get a hint. Creative bookkeeping won't save a country from recession.
SpyMasterTrades
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Agree. The worst of the volatility always comes when the yield curve normalizes.
averkie_skila
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Now that's an interesting idea (and there are very few interesting ones).
BlkGold
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Very interesting! However, I think that the current situation looks more like early 2019 than the highlighted areas on the chart. The reason is that today's situation is similar to 2019 is that in both cases, a large drop in the stock market indices preceded the Fed rate hike pause.
Kevstakt
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Sucks to be a bear right now.This pump could double top aths
Fed pauses/cuts only occur due to economic danger.
Economic danger = volatility in markets.
I don't understand why people still don't understand this considering how obvious it is from looking at FEDFUNDS vs. SPX.