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Strategies & Market Trends : The Art of Investing

PICK 46.18

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To: Sun Tzu who wrote (4458)	6/18/2022 6:37:32 PM
From: Rarebird	Read Replies (1) of 10587

That's exactly what most astute traders are afraid of. Why not take the Fed at their word? Multiples, fair value don't mean anything until the Fed pivots. In fact, multiples will continue to contract intermediate term until the Fed pivots. It is not that complicated. When Bostic from the Fed spoke of a pause, the Market perked up. Then when Powell and the Vice Chair refuted the idea of a pause, the Market headed lower ever since. Stocks can get to August 1982 valuations if the Fed continues to hike. Market accelerated its decline in 2018 when the Fed started QT. Problem with bear markets is that rallies are sold and dips are not usually bought. That's why extreme bearish sentiment is not bullish in a bear market. Extreme bearish sentiment is only bullish in a bull market with MAs rising and little to any overhead supply above. The Fed blew it last year by being naive with "transitory." They are making the same mistake from the opposite extreme of peak inflation. As for the earnings, it really depends on future guidance in terms of whether the stock rises or falls.

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