it’s happening again. In 2022 he’s on his fourth bear market rally, with so many talking his heads asking everyone to join the pool. The problem is that there is still something floating in that pool that could cost a lot of capital, they say this rally will be different than his previous three. Notice those statements. I prefer to let the market do what I do, but that usually works best.
Beware of This Latest Bear Market Rally
This latest rally has pushed the index up 12% since the beginning of October. This is impressive, but not as strong as the increases in March, June and August. The previous index saw a jump of about 20% in six weeks. All those gains have vanished thanks to the Fed’s aggressive and hawkish monetary policy. At the time, regardless of the rhetoric, rate hikes were unlikely to end or even slow down.
This time around, significant oversold conditions and slightly lower inflation have prompted stock buyers to pile up, and they are doing so. Indeed, we see a change in the nature of the indicator. The MACD is in a buy signal and the intermediate (weekly) signals from money flow, rate of change and stochastic are all bullish. But remember, we’ve seen the same thing happen in the summer.
Don’t assume that these speakers know more than we do or have access to information we don’t. They know no more than we do. They just have a platform that amplifies speculation on wild outcomes. Listen to them and you will definitely lose money. It’s probably a naive thought, “Oops, I was wrong.” That doesn’t cut it in my book.
Notice the chart. The market itself will tell you how to proceed.