I think some positive US inflation report’s got out, but you never know what causes the random market-beast to move.
I hope for a wild bull run until I have some more dry powder, then I’d like a short but dramatic correction to invest it 
Just can’t help my market timing misbehaviour…
Confirming johndoe’s US inflation report for July below expectations.
For the time being, there doesn’t seem to be much expected that could stand in the way of a rising stock market and we could have bottomed, though I’d not call a victory until late autumn and into the winter. Also, one month of low month over month inflation doesn’t mean the beast is tamed, far from it.
And therefore the market is pricing a higher probability of 0.5% and a lower probability of 0.75% rate hike by Fed in September.
The bears will really be cornered if the S&P 500 can close above 4,232, which is mere 20 points away. That would be a 50% retracement of the bear-market decline, which never occurred in any of the prior 13 bear markets dating back to 1946. If we close at that midpoint, it suggests that the low for the bear market is behind us. It is no coincidence that the low would coincide with the peak in inflation. Rates of change are at work again.
Patterns work until they don’t anymore. Firsts are scored on a regular basis, and new patterns are crafted immediately after.
For entertainment, XKCD has a somewhat related comic with the lens of elections commentary: xkcd: Electoral Precedent
Not saying we’ll ever get lower again than we are now, we could go straight up going forward, but not saying we couldn’t have a drop even after a close above S&P500 @4,232.
Also, I think people often misunderstand bears. Many bears don’t actively try to crash the market and rejoice when the market does, they just consistently prepare for Winter, grab opportunities when they can (because “bulls” weren’t ready for them) and still enjoy bull markets like your regular bull. Money is made in Winter, when opportunities abound, but wealth materializes during the Summer bull markets, when the seeds planted in Winter grow.
I’ve been reading 2-3 sources that claim that there are lots of signs pointing towards “the economy” recovering – the worst of it being over.
Currently don’t have the headspace to properly inform myself about this claim about the big picture.
Does someone have a good recent resource making a claim in either direction?
Also this poll (only vote if you have more than no clue – I won’t be voting 
)
0 voters
In the long run, I’m a perma-bull. Otherwise I wouldn’t be investing. Earnings, employment reports and consumer spending look nice, inflation’s softening, Ukraine, while horrible, is no WW3, and we’ll find a solution for the energy issue & supply chains eventually. I’m all sunshine 
I’m curious as to what the Larsson indicator is indicating 
Can you point us toward some of them? I’m searching for signs that supply chain issues are getting better for the long term and I’m not really convinced as of yet. What I’m seeing is consumption being strong, which is what raising interest rates is meant to fight, so I wouldn’t bet we’re already past the bottom.
I really don’t know as of yet, I think we’ll only know more after next Winter, so I haven’t voted in the poll.
Nice analogy!
The problem is there is no calendar so we don’t know when winter is and when to plant the seeds. Has it passed now and is it spring already? Or is it still autumn?
If you are a long term investor you probably don’t want to try and perfect the timing too much:
“Some 80% of the gains in the S&P 500 over the 20th century came not from changes in valuation but from the companies’ earnings and reinvestment of retained capital. If you were a great (and long-lived) value investor who bought the S&P 500 at its low in valuation terms, which was in 1917 when America entered world war one and it was on a P/E of 5.3x, and sold it at its high in valuation terms in 1999 when it was on a P/E of 34x, your annual return during that period would have been 11.6% with dividends reinvested, but only 2.3% p.a. came from the massive increase in P/E and 9.3% (80% of 11.6%) came from the companies’ earnings and reinvesting their retained earnings.” (Fundsmith 2019 letter to shareholders)
Or Charlie Munger:
“Over the long term, it’s hard for a stock to earn a much better return that the business which underlies it earns. If the business earns six percent on capital over forty years and you hold it for that forty years, you’re not going to make much different than a six percent return - even if you originally buy it at a huge discount. Conversely, if a business earns eighteen percent on capital over twenty or thirty years, even if you pay an expensive looking price, you’ll end up with one hell of a result.”
Oh, there could be easily another 20-30% crash, so be prepared.
While I personally think that there are knowable risks, whose piling up or absence can point toward the investing situation being “safer” or “riskier”, you don’t always have time to prepare and there also are unknown risks that can manifest anytime and have many kinds of consequences.
My personal philosophy is:
Stocks become cheap when other people are either unwilling or, very likely, unable to buy them even at their heavily discounted price. Make sure if a downturn happens, you will have money ready to invest when everybody is running dry.
That means, to me:
Secure your income stream/employment position and develop a useful and sought after skillset so that you can bounce back if you end up unemployed/without income during a downturn.
Know your needs and what you can make do without if you need to.
Be mentally prepared: keep in mind that your situation can change and what you have may disappear (be destroyed or taken away) at any time. Be willing and ready to make do without if you have to.
Keep whatever is needed for your needs away from identifiable risk and in working shape (for investments, that means cash, for food, shelter, medicine or energy, that can mean making sure you have several ways to get access to them, checking the “use before” dates, and keeping things functioning and within reasonably close reach).
Build and maintain a network of relationships with an ability to help and/or useful skills.
Taking the right insurance policies to secure the wellbeing of your dependents would fit somewhere there. Having no dependents, I haven’t put it into my personal list yet.
In short, you don’t really know whether it is spring, automn, winter or summer. What you see are opportunities, or a lack of them, and you stay ready to seize them as you identify them. It’s not that different from your regular advertised buy and hold strategy at the correct allocation for you and with a properly funded emergency fund, which I’d argue is a facet of the mindset. What’s important is just to avoid going into the summer with overdosed exhuberance, expecting it to last forever.
As the saying goes: bulls make money, bears make money, pigs get slaughtered.
it’s a bear rally, not a recovery.
we are in a downtrend
We were too oversold. Now the
so now it’s back to “buy like there’s no tomorrow” and potentially an SP500 ATH again.
But this winter and most probably, next summer might look very different.
The positive look on things:
I would personally expect an SP500 ATH or near-ATH this year and then a downward trend to continue in 2023. Hold onto your chips and keep your Stop-Loss orders close.
you may very well counter the “speculative nonsense” with actual arguments of your own macroeconomic views, if you have any. with that, you would add actual value to the discussion rather than simply arrogantly bashing people without offering any alternate view.
I believe this would be a case of “expected” (the winter energy prices and expected next summer food crisis are consequences of what’s happening now) versus “belief” (many still seem to struggle to come to terms that this indeed is happening and are living in the immediate present where the CPI increases are flattening without trying to infer what may be waiting further down the line).
I don’t trust my own analysis enough just yet to be as positive as @user137 (thanks for the summary!) but I’m not on margin right now because I think there’s a high likelihood of another bigger drawdown to still be down the line.
This is in part why it’s hard to benefit from the gains from the bottom of the market when trying to time it, by the way. If I’m wrong, this was the bottom and we’re seeing a durable uptrend from here, I will have left considerable (for me) money on the table (which I’m doing because the risk isn’t worth the prize in my opinion).
I have a rather negative trend vision with a potentially huge FOMO-rally coming up next.
But in general I am still awaiting judgment day.
(disclaimer: I talk slightly from a position, we’re sitting on a ton of cash).
This will change soon. It’s a lagging indicator.
This would inflate even more the bubble.
Same, but I hope it is going to be more a “soft landing”
I’ve seen recently on a newspaper that global container shipping rates are slowly but steadily going down since September last year, even though they’re nowhere near the pre-pandemic levels:
https://www.statista.com/statistics/1250636/global-container-freight-index/
No idea what it means for the broader economy but it might be a sign that there’s already less pressure on the supply chains now.
The Fed Funds Futures now see a peak terminal rate coming in April instead of February at a level of 3.62% versus a prior 3.26%.