I am continuing to urge caution and vigilance for equity investors. My research is strongly suggesting that there still is downside ahead, and evidence is slowly building for having to introduce a new downside target below my longstanding key zone of 3,500-3,600. UGH, don’t shoot the messenger as it’s the indicators in my analytical toolbox.  I am yearning to get back to the bullish views I had from 3/20 to 3/22, but my process is to follow the evidence with a discipline, and they remain pointed towards the bear. 

Generally, though, what happened earlier this week at the FOMC meeting has been consistent with my research and commentary over the past couple of months. In my opinion, whether 50 bps or 75 bps was the appropriate level to hike right now is not too relevant in the bigger picture of everything that is going on now.  On the other hand, what is pertinent is that the U.S. economic growth is clearly slowing, and that my proprietary earnings revisions work shows that estimates for corporate profits will surely be too high and need to be lowered over the coming months barring a sudden decline in energy/commodity prices.

Historically, this adjustment process takes some time to play out, in fact the analyst community appears to be sitting on their hand...

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