The tug of war between the Bulls/Doves and Bears/Hawks continues as we head into the home stretch of 2022.  There has not been a lack of data and headline news for both sides to try and make their case as the S&P 500’s rally that began in October is still hovering near 4000. 

As has been the case since the end of 1Q22, my strategic work is still not supporting the rally, continuing to signal that the equity markets retain considerable downside risk.  From time to time over the past eight months, my tactical work has flipped from unfavorable to favorable, suggesting that a countertrend rally was likely and at each one, I have advised that strategic accounts should not actively participate and chase higher, but aggressive traders could take a chance to play the wiggles. 

My longstanding unfavorable forecast remains on the table and the main points continue to be valid based on my key indicators, which are 1) forward profit expectations remain too high, and cuts are still required; and 2) higher for longer from the Fed.  Despite the bounce attempts during 2022 from tactical oversold conditions that were fueled with speculative hopes of Chair Powell and Gang turning dovish, my analysis has not shifted much, if any at all, since my initial move to...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)