$SPX $NDX $DJIA $SPY- Nasdaq has almost broken the 200MA. I think we're due for that long correction. There is basically no reason for a bull market. The market is changing from a cheap money induced rally to earnings. This means company stock prices will reflect earnings and profits rather than the Fed just injecting cheap 0% money. Speaking about the 0% money: Investors have to realize that there will be market turmoil when the Fed raises the FFR. I believe the Fed has to raise rates more than a measly 25 basis points to combat 7% inflation, but, they are torn because if they raise it much higher and faster, it'll hurt the market the market. Look at the FFR vs Dow, and you'll see when they rose rates, it not only brought down the stock market but also caused a recession. The pressure on the Feds head is so enormous because they have to raise rates both high and small enough to not tank markets and cause a recession. This is basically impossible. Dont be fooled by one day rallies.
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@Elmoknowsstocks - It depends on what the Fed does. We will see at least a 30% fall from here. The issue is that the market is currently trading anywhere from 2-20 times earnings. Stocks are overvalued and there is a reason small caps aren't rebounding either, because investors are going to start trading based off P/E because the Fed when it starts tapering, the market wont be making new highs and there wont be support. Now, the Fed can always reverse and continue its $80 billion dollar a month buying spree, but the Fed can not keep rates at 0.45% interest because inflation is growing out of control. How bad can it get? It can easily drop passed 2020 lows. We can see a new depression in the stock market as fear leads investors into cash or treasuries. This is a more likely scenario. How good can it get? The Fed can increase its bond buying program and continue the bubble until it can't. This is less likely.
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