The market is a forward discounting mechanism and looking back my stance is that the stock market are anticipating a pause in the FED stance. Hinted on Wednesday by FED Chairman Powell who said "smaller rates increases are likely ahead" as soon as December.
If the market is anticipating a pause, THE GENERAL MARKET INDECIES are likely to push forward. This of course is different to the actual stocks pushing up. So my stance is Discipline until I get good enough traction.
The real question is HOW MUCH HAS BEEN DISCOUNTED already?
Thank you for the analysis. What happens though if there is a shift in narrative. Current narrative is stocks are falling because of Fed hikes. So a .50 rate hike or surprise, a .25 hike seems bullish. But why would the Fed want to suddenly pivot? My analysis of the Dot Com cycle and Financial crisis is that hiking was followed by cutting. When rates began to get cut, is when the selling really started in earnest. Interesting inflection point right now though. Top of the down channel and CPI print next week right into Fed meeting....Juicy!
TintinTrading
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@AlexiBotkin, Hey Alexi! Thanks for sharing your insights! Not every market is hte same but they do rhyme. I do not see enough evidence to get me going that we will have a .com or GFC bear here. I actually think we will play closer to a 1994 bear market (reasons I have shared in the past on YT + newsletter). For that reason I believe we will get with something like this:
Market is a forward looking mechanism and a shift in the narative and language would get everyone bullish, but the job of the fed is to dampen this and manage inflation so it is likely going to be more hawkish in its language next meeting - but we do not know :)
JoeChampion
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Makes sense mate, thank you!
etcopo
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Good analysis. After anticipating a crash for years seeing all the bloated stats thinking at some point human manipulation can’t delay forever, I’ve come to realize over the last year that it isn’t just partially, but 100% live action theatre. And it does not feel like it is time for the rug pull yet.
This part of the movie is melt your face off rally, where the public yet again forgets markets can ever drop. When the public is all in, rug pull.
Basically Roadrunner vs Wile E Coyote. He just never learns
Rockqet
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Hello, I agree with your bullish bias on the SPX. I am currently in a buy and looking to take profit at 4177.51, which is slightly above the 78.6% Fibonacci line. Please consider my suggestion:
TintinTrading
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@desmondlzw, Yeah we will have to see how we go. I trade mainly stocks but the environment is showing first signs of improvement.
mjcpaull
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It won't be a pause / it may be a 50bp increase not a 75bp increase... not a pause
TintinTrading
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@mjcpaull, yeah I agree with you…more precise is to say pause in raising. :)