I’m writing this ahead of the three day Memorial Day Holiday, so I’ll try and keep it short. Like many of you, we too have some delicious plans for the weekend, and writing a long drawn-out article wasn’t high in the ranking. Ha. But I do want to talk briefly about the market and what I see happening.
For over two weeks, I’d been looking for a bear market bounce to occur. Maybe three actually. But each one ended up just being a one-day wonder, where on very low volume they’d send the DOW up 4, 5, 600 points, only to see it roll over and flop the next day. It was frustrating, not to mention the intra day volatility that often saw round trip swings of 900+ points. Great for daytrading, but not so hot for swing trades, or short term holds.
Well, starting this past Monday, the market (especially the DOW) decided it was finally time and we’ve seen them put in a powerful reversal. It was pretty overdue, as the market had fallen for 5 weeks in a row. But we finally got it and because people have short memories, there’s a ton of chatter that the bottom is in, and now we’re starting the first legs of a new bull market.
That could be possible. Anything is possible. But is it probable? That’s up for debate. So really quick, let’s ask a few questions and see where the answers lead us.
I’m writing this ahead of the three day Memorial Day Holiday, so I’ll try and keep it short. Like many of you, we too have some delicious plans for the weekend, and writing a long drawn-out article wasn’t high in the ranking. Ha. But I do want to talk briefly about the market and what I see happening.
For over two weeks, I’d been looking for a bear market bounce to occur. Maybe three actually. But each one ended up just being a one-day wonder, where on very low volume they’d send the DOW up 4, 5, 600 points, only to see it roll over and flop the next day. It was frustrating, not to mention the intra day volatility that often saw round trip swings of 900+ points. Great for daytrading, but not so hot for swing trades, or short term holds.
Well, starting this past Monday, the market (especially the DOW) decided it was finally time and we’ve seen them put in a powerful reversal. It was pretty overdue, as the market had fallen for 5 weeks in a row. But we finally got it and because people have short memories, there’s a ton of chatter that the bottom is in, and now we’re starting the first legs of a new bull market.
That could be possible. Anything is possible. But is it probable? That’s up for debate. So really quick, let’s ask a few questions and see where the answers lead us.
Most of the euphoria this week, has been the new feeling that the inflation is already starting to come down, and that the Feds will probably only do two more rate hikes, then pause in the fall, realize they don’t need to do more, and then even “pivot” to ending rate hikes and actually cutting them in 2023.
As far as inflation coming down, they’re only pointing to housing. Yes housing is slowing, it had to, it’s in a bubble. When the 30 year went from 3.4% to 5.5% in what seemed like a heartbeat, that added upwards of 200-300 dollars per month to the average monthly payment, a number many couldn’t make. Add that to the insane prices that housing had attained, and the bottom line is that the bubble popped.
The old adage says, “the best cure for high prices, is high prices” and houses sure got high. According to the St. Louis fed, the average price paid for a house in the US during the 1st quarter of 2022 was 507,000 dollars. So, between much higher mortgage rates and uber expensive houses, things are starting to crack. Yes that will pull down other inflations such as lumber, and concrete.
The story goes that the Feds will see this reduction in inflation, and then put on the brakes “just before” taking us into a recession. Well excuse me, but frankly we’ve been in a recession since 2008. Our growth wasn’t fueled organically via production and sales. It was fueled by Qe1, Qe2, the twist, the expansion of the balance sheet to unimaginable levels, and a dozen other “tricks” the Fed played.
Now it is absolutely true that in the past the Feds have been slaves to the market. No question what so ever. If the market pouted long enough that people’s 401Ks were now 201K’s, the feds would rush in, start cutting rates and pumping more trillions into the system.
The only question we have right now is simply this: Since the Feds can’t stop inflation from the supply side, meaning that they can’t produce products, or increase the number of widgets on shelves, are they once again going to stop hiking rates, tuck tail and start cutting them again? That’s what the street expects, that’s what they’ve done for decades.
But what if it’s different this time? Hmm, good question. I suggest you look around. Does anything you see, resemble the “normal” of years gone by? Just because “normally” the fed bows to the markets ( and to politicians) and goes back to cutting rates and expanding its balance sheet, does that mean It will always happen?
I suggest that in “normal” times, we don’t have weaponized viruses tossed on us. In Normal times, we don’t have a proxy war with Russia, with real guns and artillery and maybe the use of nukes at some point. In normal times, my government didn’t lock me in my house, tell me I couldn’t go to the beach, or a bar, or church or a funeral. You all know I could go on for ten pages about what’s been normal, versus normal today.
Klaus Schab stated “if you think things are going to go back to normal, normal like you considered it in the past, you’re living in a fantasy.” Normal is being distorted folks. The New normal is a frightening thing.
So, with that in mind, is the fed going to act in its normal way and respond to the will of the market? Or has normal changed there too? Here’s my bottom line on it. I do NOT know if this is the period in time when normal changes for the Feds. But at some point, they are going to crush this market like a bug. Could it be now?
Don’t forget for one second, that Klaus and his club of Rome idiots, and his giant gathering of movers and shakers at Davos, could not implement a single agenda they have…if the bankers aren’t behind it. Period.
So, when Klaus and Co. say you’ll own nothing and be happy, there’s NO WAY they can move forward with their great reset, unless ALL the banks are okay with the plan. That’s the IMF, the BIS, and every central bank on earth.
Powell is simply a pawn on the elitist chessboard. Lagarde, Draghi, all of them are puppet actors in the globalists play. When those very globalists say it is time to crush the market, the market will be crushed. Simple.
How can you own nothing and be happy, and yet still have say a 200K dollar stock account? Am I to believe they want Lordship over your health ( they do) your homes ( they do) what you can eat (they do) Where you can go (they do) how much energy you can use (they do) but they’re going to leave everyone’s stock holdings at record highs?
Well, I don’t. I think “it’s different this time.” The globalists have shown you their intentions. I cannot possibly believe that one of them is to let the middle class enjoy wealth created in the markets. Which means there’s a very good possibility that Powell will NOT stop hiking rates, and will NOT pivot and start cutting once everyone’s portfolio’s take a hit.
I know that view isn’t popular. I don’t think forced vaccinations are either. But we got them. Granted, I could have it all wrong and they do follow the same play book they’ve used for 40 years. Maybe the time isn’t right yet and the fed’s haven’t gotten the wink and nod from the higher ups. But looking around and seeing the false flag shootings, the WHO gunning for total control of the Global health system, the push for new gun control, the mess that is indeed Taiwan, and a hundred other things…me thinks what “used to happen” might not happen any more. We’ll see.
In the meantime, the market is in a bear market bounce. They are often bigger and longer than you think, meaning, get what you can, while you can. I think we’ve set a short term bottom, but not THE bottom. I think that’s quite a bit lower.
Good luck all, and I pray you’re enjoying your weekend, and tipping your hat and saying a prayer for the millions of folks that have died in service to their countries. War is horrible, it shouldn’t exist. And the brave folks that fight in them should be remembered. To a man, the poor guy on the battle field, did not start the war. That’s the politician’s game. Sad.