3/28/2016 – A positive day with the Dow Jones up 98 points (+0.56%) and the Nasdaq up 80 points (+1.67%).
As is evident from today’s market action, most market participants are obsessed with what the Fed will or will not do and/or what Janet Yellen has to say. Yet, they are missing the big picture.
Before we get to that, here is just a quick look at how crazy today’s environment is.
- YELLEN: The Fed is in no rush to raise rates
- Gundlach says April rate hike ‘inconceivable’ after lower GDP forecasts
- Another U.S. rate hike may be around corner: Fed’s Bullard
- Fed’s Williams urges U.S. central bank to stay on track with rate rises
- Fed Chair Yellen has a mini revolt on her hands
So, none of the above should come as a surprise to the readers of this blog. I have been arguing for close to a year that the FED will not raise interest rates in any meaningful way. Why The FED Will Not Raise Interest Rates
Why?
They cannot. Even a 100 bps hike here would send the US Economy into a tailspin. Plus, the FED is now entirely market dependent, not data dependent. They’ve admitted that much in their last policy statement. Finally, they want inflation and a weaker USD, and that requires loose monetary policy.
With that said, I continue to maintain that most investors are missing the big picture here. Sure, these “Dovish” statements cause market rallies, buy they are becoming increasingly insignificant. The first problem has to do with the chart below. As it clearly shows, we are basically in a massive overvaluation bubble.
But the bigger issue here has to do with the fact that the FED is out of tools. With the US/Global Economy slowing down, there is very little they can do with interest rates at zero.
In other words, Central Bank Mafia Goes All In…Stocks Rally…A Little
Now what?
Do you really think the stock market can generate a sustained rally here given the fact that stocks are incredibly expensive, the FED has no stimulus tools left and the global economy is rolling over into a recessionary environment? If you do, you are clearly seeing something that I do not.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. March 29th, 2016 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
