The sell off that started in December 2021 and January 2022 was thought of the "crash" that most logical analyst and economist are waiting for. It was illogical for markets not only recover the March 2020 sell off but set a new ATH during a year which saw the largest unemployment event also a pandemic and recession. The rally we know was Fed induced stimulus through QE corporate bond buying.
The day the Fed announced tapering, rate hikes, and shrinking balance sheet is when the markets started selling. It wasn't ANY other reason except this. A market fueled by Easy Money will not continue to rally if the very things that fueled it are taken away.
The rallies we have been witnessing are fueled by Corporate Buy Backs. In fact, according to Bank of America data, Retail Investors and Institutional Investors are still net sellers. This rally will be short lived. The economic data is still worse than expected and getting worse.
BUT.. it seems that we will see a new ATH for the S&P500 before the actual crash happens. The Nasdaq should not make a new ATH, but the Dow has a great possibility it will. We could see a Double-Top followed by the crash or a new ATH.
A conservative 35% fall would put the S&P in the low 3,000s.
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So far, it doesn't seem like earnings season is giving the market the boost. If the big names like FAANG miss earnings, we will see markets in big trouble, although the actual deciding factor was the horrible economic data, we know the market is a speculative casino and is no longer based on the economy.
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Bear market started early? Let's see what this week in earnings bring.
Trade closed: target reached
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Target reached, sooner than predicted but reached nonetheless.
Hi i would like to have your opinions. Where should be bottom for spy???
WorldEconomics
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@tdnn74, - Thats a hard one. Why? Well it’s because this market has been fueled and pumped up by QE. It hasn’t been a natural moving market since 2008. You’d have to look from early 2007 and back to find a long term trend line. Personally, it’ll be under 200 for sure. That could happen by years end at this rate.
ashkanmrtzv
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Would love to hear your thoughts on why you think SPY will hit new ATH before crashing!
patrick3309
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@ashkanmrtzv, double top. itll have to go right around the ath in order to double top... itll probably have a false break of ATHs before
WorldEconomics
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@ashkanmrtzv, - The economic data is very bad first of all. The markets started crashing in 2020, but the Fed came to the rescue and started pumping it full of liquidity through "QE" and also 0% interest. Well, the Fed got rid of QE and has started raising rates which means this bubble can not continue.