The ASX200 is under pressure as price falls into the weekend on stock market meltdown fears. US rate rises and inflation, along with other concerns, are weighing on bullish sentiment and testing the patients of buyers. Is this the calm before the inevitable storm?
To me, the 7175 level is the line in the sand after the recent RTF (Double Top) at 7625, and buyers will need to hold the line if we are to see higher prices. Price has extended into the level so may see a bounce on some bargain hunting in coming sessions although this will largely depend on how the US performs tonight.
US bonds are pointing to four rate rises this year which is more than expected and pressuring markets. There are some saying that the US Fed has made a mess of easing and have left it too late to contain inflation so will be chasing with faster tightening. If this is the case, I do not see traders wanting to add risk to portfolios or Funds willing to support price...so now is the time I am happy to be cautious hence the recent short on the ASX200 CFD.
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When the fed comes out and says they are going to increase interest rates it means the world is entering a new phase of massive growth, what they are trying to do is to slow down the growth so they don't leave people behind. Markets trend upwards if you don't believe me do a 100-year chart analysis on any index you like. In 2018 I experienced interest rate hikes look where we are, imagine those who went out on their super, they would have missed a massive pump. So in my theory, we are looking at 5 to 25 percent correction, but I don't think the Fed will let it fall below 25 percent unless they want to create a massive recession/. I don't think so! It's the usual game of manipulating growth through the mechanisms of monetary easing, trying to control inflation and wash out over-leveraged positions, but as I always say no one can stop progress.
RogueCleaner
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winter is coming. infinite asset growth is not sustainable without the side-effects of massive inflation. RBA might step in and start buying... so many superannuation funds gonna be hit