Firstly, market is utter crap right now. The whole end of quarter bear market counter trend was due to hedgies trying to salvage some end of quarter numbers and a rollover in 3 trillion dollars worth of options. Now the dust has settled and the downtrend reversal seems to be in again.
CPI/PPI numbers for Match are due next week and it's going to be the largest print yet. It includes peak oil and Russia/Ukraine disruptions. Bond yields are spiking like a runaway train which will put additional downward pressure on the markets. Feds have clearly indicated Inflation is front and center at this point and QT will wipe off 95 billion from their balance sheets monthly. This is double what was done in 2017. Rate hikes of 50 basis points have also been trending. Another factor to consider is the rising dollar. This has historically been bad for stocks.
I think this drop will lead to a capitulation bottom scenario where we reach extremes, which will be followed by a potential topping process where we reach new highs this year. I think after that we will see a substantial correction towards the end of this year.
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