Can only lead to unprecedented Whiplash. What this FED has done through it’s lackies is to treat the result rather than the cause. Stocks didn’t go up on their own and cause inflation, the Fed caused stocks and inflation to go up by their liquidity injections, but the 9 Trillion is still sitting there, playing havoc with inflation, long commodities and short stocks at the moment.
Maybe manipulation was the only way to try and unwind the effects of the artificial stock market. The result, at the moment stocks and bonds are cheap relative to the balance sheet model.
How is this going to end? We will all find out. I don’t think being short stocks one the heels of the manipulators will play well.
12:30 PM CDT update
I try to stay aware that all the resources of the FED are focused on making their fight on inflation work, and the primary way that they are trying to do that is to break the inflation message that has permeated the retail investing crowd. This will keep volatility high with huge selling by groups, the same groups that bought stocks after August 10, 2020 and created the bubble. Today’s early trade is a good example, so I am watching RSI and buying in the sweet spots on back-offs. There will be a time to buy new cycle highs but we are not there yet.