I've been saying for a while that if bond yield surpasses 1.7 then it would signal that stock selling might override the dip buyers. The yield is now above the 1.7 mark, let's see how we go from here.
This doesn't help the situation... https://www.bloomberg.com/news/arti...e-credibility-with-50-basis-point-hike-ackman The sad thing is...They could hike the rates by 1,000 basis points in March. That will not resolve inflation, because the goods are still stuck at the ports and demand is high. It's a no-win scenario for the Fed. Markets are screwed.
Time to take stock... HSI & IBEX are the worst performers at over 30% below their highs. The DOW is the best performer out of the US Indices with a 12% drop compared to -20% for the others Amazingly the ASX is the best performer at only 9% down. All this is before the FED takes any action, the consensus is that the FED is behind the curve and likely to make a policy error, at worst this will put the US economy in a short recession. The Buffett Indicator is down to 175% from a 210% peak but still shows that any investment at this point is likely to result in a loss by end of the year. The anticipated 30% correction in US stocks looks likely this month. I have yet to enter into long positions and looking to do that below 30,800 for the DOW.
Maybe my math is off, but I have the high at 4818,62 on the 24th of January and the low on the 24th of February at 4114,65. That's a difference of 703.97 points and a % change of 703.97 / 4818,62 = 14.6 %. NDX was well below 20 %, though, at 21.8 % down from high to low. Any thoughts moving forward?
You are right, S&P is -15% rather than -17% as was said My thoughts remain as they were stated in Jan i.e. I maintain that when the S&P reached 215% of GDP, it got into bubble territory so the 30% correction is still on the cards (although the timing is hard to predict due to the persistent and clueless retail dip buyers that are still active), therefore, I'm still not playing the long side at this point. My opinion remains that Powell hasn't a clue on what the Fed's mandate is and he has steered the Fed into a policy error. Powel was wrong in his "transitory" view and is now in panic mode due to not having taken action when action was warranted. History tells us that markets usually can absorb 3 x .25% rate rises but stumble on the 4th and beyond. There are 2 ways to look at the markets, we can look at them as being in late-cycle starting from 2009 with the 2020 sell-of as part of the cycle. Or we can look at 2020 being the start of a new cycle and say that they are now at the end of that accelerated cycle, either way, we are due for a correction. I expect the Feb 2022 lows to be taken out soon and to go lower than that when the rate rises go beyond .75%, in between, the 1% or so daily volatility will continue until the dip buyers have been taken-out.