Major averages finished roughly flat to slightly up on Friday on lower volume. Expect elevated levels of volatility to continue for the time being as such levels are typical following a short, sharp correction. Most formerly leading/leading stocks have done little more than rally back up into the "underbellies" of their chart patterns, with many names pushing right into potential overhead resistance. Whether they are able to move higher over time remains to be seen, but for now the odds favor at least some sort of retest of last week's lows.
Core inflation fell in July giving the Federal Reserve another reason to delay hiking rates when they meet in September. The Fed was leaning toward a rate hike in September until China's currency devaluation according to Federal Reserve Vice Chairman Stanley Fischer. Fischer was upbeat about the economy and said he was confident that inflation would return to 2% in the medium term.
As we wrote to our members on 8/27/15: Some analysts including Ray Dalio who is the CEO of Bridgewater think that the Fed is lining up for another round of QE, or QE4. With global central banks in full throttle money printing mode, and with the global economy nearing recession, central banks have less and less room to manipulate markets higher, thus should the Fed eventually paint itself into a corner, a loss of confidence in the Fed could spark a far more serious correction down the road. But making predictions of if and when such a crash would occur is futile.
As always, with all the market crash talk that has been asked of us these days, we examine markets in real-time, day to day, so that gives us enough to know what to do on the long and/or short side. Keep in mind that no one has ever demonstrated with any consistent reliability the ability to predict the timing or depth of market crashes. The future doesnt exist. At www.virtueofselfishinvesting.com, all we need to know is the now.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2022 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.