Hey, do you remember that awesome rally after Powell’s speech last week…and how the bulls were claiming victory as stocks went soaring above the 200 day moving average?
Yes, that bout of irrational exuberance is over as foretold in my last commentary: Is the Bear Market Over??? (spoiler alert…NO IT AINT OVER!).
The more updated, educated, and elucidated version of that story is shared with you below…
Indeed, it looks like Mike Wilson of Morgan Stanley called it right when he previously predicted stocks would rally to a range of 4,000 to 4,150 before the bear market resumes in earnest. Thus, after reaching those temporary heights last week he is now reminding everybody to prepare for bottom somewhere between 3,000 to 3,300 by April 2023.
This outlook is not a surprise to Reitmeister Total Return members as I have been beating the drum about this being a long term bear market where we have not yet seen bottom. And not to be suckered in by any of these seemingly impressive bear market rallies as they are all just mirages.
This explains why I still have a hedged portfolio in place to profit as the serpentine pattern of this market eventually winds lower. Just like the +1.86% gain the past 3 brutal sessions for the overall market.
The oddity of recent action is what has become bullish vs. bearish catalysts. I thought it would be useful to summarize that for you folks today to appreciate the events that lead to rallies…and those that get us back in bear market mode.
NOTE OF CAUTION…
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