First sell off from $69K to a $46K / $52K range: -33%, duration 25 days
Then the flag is broken and a second sell off starts.
Macro backdrop: FED is talking about tightening, inflation too high, debt too high, US elections end of year.
FED trying to lower inflation without crashing the market.
Looking to buy at selling exhaustion. 2nd leg should go to -33% or last 25 days. If it goes to $35K (-33%), it would be a -50% drawdown from the top, like the drawdown in April June.
Ready to change my mind and buy sooner/higher, if CPI is improving tomorrow (they changed the calculation, maybe to get a better number), or next FED minutes is less hawkish.
Then the flag is broken and a second sell off starts.
Macro backdrop: FED is talking about tightening, inflation too high, debt too high, US elections end of year.
FED trying to lower inflation without crashing the market.
Looking to buy at selling exhaustion. 2nd leg should go to -33% or last 25 days. If it goes to $35K (-33%), it would be a -50% drawdown from the top, like the drawdown in April June.
Ready to change my mind and buy sooner/higher, if CPI is improving tomorrow (they changed the calculation, maybe to get a better number), or next FED minutes is less hawkish.
Comment:
About the midterm elections in November, the democrats need the inflation to be lower to get votes, but they cannot affort to tank the stock market and put the economy into a recession. Also if they raise rates too much, the US debt is more difficult to repay. So it will likely be a theater until the election in November. Maybe they will fight a bit inflation then reverse course when the stock market starts to nose bleed.