Last week was about as volatile a trading week as most traders could stomach.
The various indexes and averages moved to the plus side for the week’s trading activity
What was important was the S&P 500 stock index did not push below 4225.
That level drops below a trend line that if broken could push the markets further south.
The same could be said for the NASDAQ, which came close to falling below 13550.
On the flip side should the S&P climb above 4590 or the NASDAQ eclipse 15140 we could be off to the races. Much will depend on what will happen in Ukraine.
I note that it is almost unanimous that the Federal Reserve is so far behind in fighting inflation that anything they do probably won’t save us from some serious economic consequences this year.
More analysts are talking about a recession later this year.
A more realistic term would be stagflation, where the economy stalls but inflation rages onward.
A real problem is that Europe has stepped up to really enact policies to punish Russia economically.
The hard part is that it will also impact the rest of the world’s economies.
I will not predict a recession, but history is not on the side of the Fed when it comes to measures stemming inflation.
It does seem real that volatility will be the rule of the day. When you are at such high levels, it is a long way down.
It’s amazing at how investors ignore problems on the way up.
We’ll see how many will continue to buy on the dips if this market can’t hold.
It has been over 13 years since the last bear market.
Many of these young analysts have not even experienced a real down market of any sustained length.
Please don’t use the correction in March of 2020 as it was barely three months in length.
You have to go back to 2000, where it took the markets over a decade to get back to those levels.
This will be an interesting week with all the foreign affairs and the State of the Union address.
Jay Powell will testify before Congress this week.
There actually traders that think the Fed will only raise a quarter point due to the conflict in Ukraine.
What part of oil trading above $90, natural gas above $4.60 does he need to finally acknowledge that the inflation rates are not temporary and are the largest in 40 years.
Doing nothing and blaming someone else is much easier.
Anyway, I hope you don’t get motion sickness as this looks like a real bumpy ride with multiple air pockets.
Just hope the pilot, whoever that might be, can keep the plan from crashing.
