Great summary of the current market concerns over at Bonddad. Everyone else will link to the pessimistic stuff, which is so hot right now. Funny moment on CNBC today - Maria was interviewing some guy and asked something about when we’d see a short-term bottom, and his answer was something like, “whenever you people start telling everyone to sell.” Ha, so true.
Anyway, back to the bullish case for the week that Bonddad presents. It’s telling that this is the best the bulls have to say about markets that were making new all-time highs just a few short weeks ago:
There are four saving graces this week.
1 and 2. PPI and CPI are released this week. I would expect the markets to rally on a good (low) number because that would indicate the Fed has room to lower rates. (Conversely, a spike in either of these numbers could lead to a sell-off because it would lower the possibility of a rate cut.)
3. On the good side (referencing the long-term charts), the SPYs could fall another approximately 5.5% and still maintain their long-term rally. With the QQQQs, that number is 5.6%. That margin gives traders a lot of leeway in making trading decisions.
4. The ever classic random event that no one can plan for.
Okay, number 4 is always on the list, and that major, unpredictable event (or, if you absolutely insist, “black swan”) goes both ways, mister. 3 is a nice way of saying that the sky hasn’t fallen, yet. And 1&2 are essentially the same point, with the same unmentioned downside: that weak PPI/CPI numbers spook everybody, because the Fed increasingly looks ineffectual and powerless, such that weak numbers mean fundamental economic problems are worsening just when the Fed has already wasted its remaining credibility.
Geez, we were trying to make the bullish case - that didn’t last long.
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