ANOTHER COUNTER TREND MOVE

Yes…we know it is the end of month window dressing period but window dressing is illegal so it does not occur.

Another counter-trend rally/bounce. We thought one was close. The thought process was that in less than 2 months, the NASDAQ had dropped almost 25% FROM A LOWER HIGH and the S&P almost 18%. That’s a lot of cake. It was also noted how bearishness statistics in many areas had hit extremes. And then this week.

BY NO ACCIDENT, Powell sent out 2 fed heads to jawbone the markets. That has been his M.O. since Christmas of 2018. One stated they could stop raising rates in September. This is amazing considering they are still a full 2 percentage points, big percentage points below the market. On top of that, another stated they can lower rates in get this…2024. Yes…they have got nothing right in 2021-2022 yet let’s predict 2024.

But we are also seeing bad news bought up. Several companies came out with poor numbers but still rallied. This just tells you how bombed out things had become. Many retail names, for lack of a better word, crashed.

So, now another nascent counter-trend move which hopefully, is getting some teeth today. ( It’s the close that counts) It’s quite sobering that since the highs, the longest counter-trend move lasted only 11 days. We’ll see if this time is different. The move was thin but now starting to broaden out.

We are already asked about whether we think this move is THE bottom. We hope so but too early to tell. Real bear market bottoms test and retest the lows a few times. Of course, Powell can announce $100 trillion of printed money and just send things straight into the stratosphere. (not sarcasm)

There is one thing already sticking out we really don’t like. On any rally, meme stocks get a life. Gamestop on the move again. We have never seen a bear market bottom with froth and speculation. Bear market bottoms usually have a ton of doubt.

As far as the fundamentals, oil prices continue higher, at $114 as we write this…not good. Yields have backed down a bit but still way higher than the recent past and much, much higher than our central bank. Do not get us started on the policies of this administration.