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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (74466)	12/7/2022 9:24:39 AM
From: Lee Lichterman III	4 Recommendations Recommended By ajtj99 Real Man Sun Tzu towerdog Read Replies (2) \| Respond to of 97611

Well I prefaced my comment to you that it might not be that much help. I basically see it as indicating that CPI/PPI should start trending downward barring statistical sampling noise, we should start getting less upside surprises. What I don't like is that it indicates a contraction that lasts a lot longer than I was looking for before. We could get a lot of false starts/bear rallies, mini bulls that turn back to bears over the next two years. I think the bonds were pricing another few months of hikes and then a couple minor cuts at the end of next year and all would be well. The stock market is all bully on those cuts and thinks we will be off to the races again by summer. This is where I think they are wrong. It generally takes 2 years for Fed policy to filter through the economy. (QE accelerates that a bit). I have another chart I built that is too noisy to post but it overlays Fed actions, inflation and various economic indicators. The current Fed hikes shouldn't really hit until the latter half of next year and really hit until the end of the year into 2025. On the other hand, they really can't back off. That chart CLEARLY shows that our current situation was caused by the Fed completely missing a hiking cycle around 2011. They should have been raising rates and draining QE but they kept the taps open and created this bubbly mess. The result is our current situation where they are so far behind the curve that they need to do more than normal. The risks are the unforseen collateral damage that might occur. My gut is telling me we bounce today but I'm not really seeing anything in the charts backing it up. I don't have a plan yet and the market is about to open.