RtS, I think you are right.
<<You, yourself are thinking a 70% chance of a recession, that the market is still factoring into stock prices. Is the probability of a recession fully factored in?>>
IMO we are somewhere in the middle of a low growth GDP or a slip back into a recession. The volatility is high, has been for several weeks, and this week is no different as the data to be posted will show.
I think this is a good trading period, but filled with peril trying to judge which way the economy will go over the shorter term.
During the last 6 weeks, since the week closing 8/5, the SOX has gone from roughly 360 to 330 and back a total of 6 times or once a week. The postings coming up will show a little of this action.
From the start of this year to the end of June, a 6 month period, the SOX was "cycling" in the 425 to 475 range. Then from June thru July, about a 2 month period, the SOX was "cycling" in the 375 to 425 range. Starting in Aug, about the last 6 weeks, the "cycling" has been in the 330 to 360 range.
The SOX levels recently are about where they were last September, 12 months ago, when the SOX had come down from earlier levels in the year to bottom about the 310 level.
IMO, the SOX could easily continue trading in the low 300 to 375 range for many months before a strong uptrend to 400 and above takes place. In the meantime, I hope everyone who wants to trade in this environment, can make some money.
Don |
