Economy crash =/= stock market crash?

Type_45

This isn't a real bear market yet in the sense that general investors still very much want in. They are talking of "the bottom" and "buying opportunities".

In a real bear market investors want out. Almost at any cost. They don't even want to talk about equities. They are sick of them.

That's the real buying opportunity.

bd10

Type_45 said:

This isn't a real bear market yet in the sense that general investors still very much want in. They are talking of "the bottom" and "buying opportunities".

In a real bear market investors want out. Almost at any cost. They don't even want to talk about equities. They are sick of them.

That's the real buying opportunity.

Retail flows kept buying the dip in Q1. I'd watch those corporate earnings weakening/disappointing, then we have a second possibly more violent selling spree of retail trying to get out. We're most likely heading into a recession/stagflation period with rising rates at the same time, discounting those long shot cash flows. Would not want to mistake the last or maybe this rally as the real thing. Not just yet. Fed will need to continue hiking and is willing to accept a recession as outcome. Looking at history, with inflation rates where thet are we never had a soft landing in the US. That hasn't fed through to retail I think. There will be a buying opportunity but not just yet. As for banks and funds talking about buying opportunity, I'm tempted to think they're talking up demand to lighten up on their positions. I might well be totally wrong, but right now, I am sitting tight, keep my market delta very low and keep observing.

Type_45

Does it not concern anyone on here that the Fed is tightening into a credit contraction? They will be lowering rates this year. They will reverse course.

masonic

Type_45 said:

Does it not concern anyone on here that the Fed is tightening into a credit contraction? They will be lowering rates this year. They will reverse course.

If they reverse course, I think it is more likely this will come next year. If it does then markets will respond favourably.

bd10

Not sure about lowering but credit thightening doesn't bode well: stagflation. I'll keep an eye on those UST 10ys, if and when they bounce back.

Type_45

I think the Fed will tighten this year, possibly in Q3, when inflation is at 9%-10%, and the markets will see they've lost control. This is the end game. 

Type_45

This is a great audio podcast about where we are and what may be to come:  https://www.cyclesman.com/wp-content/uploads/2022/06/Ed-Dowd-062422.mp3 

Type_45

Discuss...

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Type_45 said:

Discuss...

Why aren't you all in short on S&P500 then?

masonic

A little knowledge is a dangerous thing. There is far more at play than just the QT policy.