Hey guys
today i will take a break on my Lord of the ring: The return of the king movie and i will outline some thoughts about yesterdays Fomc meeting and the 0.75% interest rate increase.
🔴 So I think we’re still in denial phase here… and now creeping into Panic. The CPI data + Powell speech yesterday has helped move the dial.
🔴 I think full panic comes if we loose June lows. This is usually where we experience the steepest decline over the shortest period of time and likely when we get a capitulation.
🔴 13/10 – We have the next CPI reading – I expect this to again be bad. Foods only gone up in September. Housing and other parts of the CPI likely remain sticky and as I said in the last CPI report I expect less and less help from the already beaten down energy sectors like oil and gas. This should induce the capitulation and the gravity of the situation should really start setting in pathing the way for the market phycology shift to ‘’retail short everything’’
🔴 27/10 – Basically the back end of October** we have housing data, GDP for Q3 and Jobs and this is where the wheels come off and everyone accepts the position we are in. Compounding the fear and capitulation and a further shift in psychology to ‘’short everything’’ after selling everything.
🔴 Then November comes… November should be interesting. Its worth noting Powell is a Republican, this is important because I think it shapes what happens next – He isn’t going to want to pressure his buddies so one final big 75 or 100 hike in the 02/11 meeting.
🟢 The Republicans come back into power – They give everyone the ‘’Realisation’’ – ‘’Guys, the democrats fucked everything for us, everything is in tatters but we are going to sort it out’’
🟢 Market takes its last down leg on the ‘’realisation’’ – Late shorts fire in HARD.
🟢 Powell comes under political pressure OR achieves his goal’s – we have a bit of fun and games with politics in Q1 and that’s where we come out of it once Powell turns the tide for his republican buddies.
🩸 Late shorts, every complacent seller gets rekt on a disbelief rally and this just fuels us higher and higher.