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Happy Weekend, traders.
After our huge reaction to the CPI print (which I don’t often try to predict), the indices have stalled and are presently producing some initial bearish structure:
As I’ve already discussed in the last weeks, while it is possible that markets are genuinely very bullish (given the strong rally we’ve seen this month), I am still more inclined to expect this rally to fail. I think we’ve had more than enough time for the lag effects of the extremely harsh Fed hiking cycle to begin to affect the economy, and I think lower prices are the more probable outcome. I also do not like the low we made in late October. We didn’t get my puts, we didn’t get an accumulation. I don’t like it one bit.
What we’d like to see after this sharp rally and all of its short-covering is hopefully a pattern of distribution. For that, I still have the same two things to say that I did yesterday.
So, we’ll see what happens here next week. This all seems to me to be just another bear market rally. I hope everyone has a fine weekend and I look forward to seeing you next week (or during the weekend if you’re in Discord and would like to chat).
Parts of this article may be reserved for members. You may learn more about becoming a member on the Join page.
You are also warmly invited to join our growing community in the Discord server (there are many public features in there). The invite link is here: https://discord.gg/58FSjcDhvG.