Current market conditions are a recipe for disaster

 Bulls have been very resilient with the fuel on fire provided by JPow. It seems all the sky is clear from now on and a new bull market has been born.

I'm not so sure although admittedly I may have to adjust the timeline how the market trend may evolve for the year. I have been quite confident that we could see a new low during the first half of the year. If that new low triggers a widespread panic and towel throwing, we may see the ultimate bottom, from which a new bull market may start for the later part of the year. But I'm not so sure about it now. Instead, a real possibility may become that we may see some shallow correction in the days ahead and then we may even start to see a fairly strong rally, which could carry SPX towards 4300-4400 during the first half of the year. Only after that, we may start to see the major leg down for the ultimate bear market bottom later of the year. It is difficult to say right now which scenario will play out and it is very important to see how SPX will behave during the current correction. It seems the 3950ish level is very critical to see if it can hold. If yes and rally from there to over above 4200, then we will soon see 4300/4400. Otherwise, a very bearish bottom finding event will start soon.

 

Regardless of what is going on, I'm still happily 浑水摸鱼

Here is what I shared with my DW Family on Monday.

You may also hear some very bearish talk from some gurus here:

Earnings season is about 75% over… and honestly, it’s been terrible. I break down some numbers that show why the headlines about “beating earnings” aren’t nearly as positive as they sound… why the next few quarters are going to be ugly… and why Wall Street’s expectations are ridiculously high. Put simply, the current market conditions are a recipe for disaster.

 

 

 

simply, the current market conditions are a recipe for disaster.