How does this all Evolve? Part 1 of 2022 Outlook
Part of this I posted yesterday. More has been added today.
This week, Market strategists seem to be agreeing that the market has hit resistance at the November to January highs depending on the Index.
What they want to do next is where the quandary exists. Seems the overwhelming conclusion is to sell a little now, get some cash to buy back after a 5 to 10 percent decline on the major indices.
All of this strategy appears to be based on the idea that a new phase of the bull market will arise out of the February 2021 price area. A belief that that area is where a new bull will arise, and a melt up move to the 6000 area on the S&P will occur.
I believe that the above idea is 180 degrees backward.
As all of you know I view this November to January market top as the end stage of the 40 year supply side economic movement that had inequality as one of its major results.
No doubt we will see a number of minor cycle moves as all this unfolds going forward. I would not want to try and layout a patchwork of support and resistance levels or timing points at this time.
What we have seen during this 40 year period is cuts, as a percent of government revenues, in higher education investments and a move of money away from productive investments and into speculative endeavors.
This is and was not a recipe for real economic growth, and when this switch to a digital economy matures, we will be left with a host of uneducated gamers.
At the moment the interest rate markets seem to have their head in the clouds looking for a booming economy. High risk Junk bond are acting better than corporate bonds. The yield curve is flattening in the belief that a few short term interest rate hikes will make everything better on higher inflation.
I am watching retail sales and inventories to get a hand on the consumer demand picture.
There is no doubt that the Covid Response of the population is having a negative effect on both real growth and real demand. Amazon and FedEx may be two of the few beneficiaries as hiding is becoming a new directional force.