Powell Pop… Don’t Get Too ExcitedThe market is popping on the hope of a more dovish Fed going forward. Chairman Jay Powell gave the market 'hope' by saying the Fed is likely to moderate the pace of hikes. But is that 'really' that bullish?
Oil: 2023 Supply Shock Coming?2022 delivered the market a nasty oil shock. But will it be the last? I don't think so. The oil price shock in 2023 will be due to massive underinvestment from the US in hydrocarbons (which still power 80% of all our energy needs). And if oil should fall to $65 to $70 - that spells opportunity for the year ahead - where I see oil back above $100.
Watching the VIX for a Market ReversalWith the VIX approaching a level of 20 - the market feels overly complacent. The S&P 500 is now around 15% off its October low - resembling what we saw in June. My guess is should we see the VIX below 20 - expect the market to reverse shortly thereafter.
Classic Bear Market RipStocks are likely to push higher through to the end of the year. It's what we usually find after mid-term elections. But for now, this feels like another bear market rally... which will likely find resistance around the zone of 4100 on the S&P 500. We are a long way from any Fed "pause or pivot"...
“Rip Your Face Off Rally“… But What’s Changed? It's what you might call a "rip your face off rally". Short traders are caught on the wrong side and scramble to cover... that's what happened today as CPI came in slightly lower than expected. But is it reason to be jubilant? Hardly.
More Tricks than Treats?The market is up around 11% from its recent lows. Its rallying on the hope of a dovish Fed. My advice is tread carefully... you might get 'tricked' rather than 'treated' this Halloween. The upside does not handily outweigh the downside risks. Bear markets are known to do just that...
We’ve Seen This Script BeforeQ3 2022 big-tech earnings are behind us - with only one winner. Apple reported inline results with weak guidance - but enough to send the stock 7% higher. The rest however were slaughtered on weak earnings and forward guidance. But it was the Facebook's "metacurse" which sent the stock reeling almost 30%... Amazon was also crushed on a poor Q4 outlook.
Bear Market Rally Approaching ResistanceMy best guess is the current 11% bear market rally could go a little further yet (e.g. maybe 5-6%). However we are now approaching a technical area of resistance. I also offer a new trade on TLT... on the thesis that yields will reverse course at some point in 2023
‘Fed Whisperer’ Spurs MarketThe rally is on... but how far can it go? I will share my thoughts. And whilst we're likely to see a short-term shift in sentiment... longer-term headwinds remain.
Short Term Rip… Then a Bigger DipAnother bear market rally or something else? My view is the former until proven otherwise. For me, we need to see yields and the dollar peak. But in the meantime - don't be surprised to see this market add 10%+ before pulling back.
