The stock market cycles are working quietly without a hitch while the media is talking up a storm about interest rates, the Fed, inflation and growth value rotation, etc.. It’s very confusing to figure out the effects from all the different variables on the stock market. The cycle analysis makes it simple as we don’t pay much attention
Despite the NASDAQ finding a bottom near its 30-week moving average in early March, it continues to be the weak index among the DOW and S&P 500. The 10-year treasury yield has made a higher high since early March, yet the NASDAQ hasn’t made a lower low. So the rising rates scare is only part of the excuses for this selloff.
There are a lot of chatters about the coming inflation and higher interest rates as the reasons for the recent NASDAQ selloff. Wall Street has been talking about the rotation from high priced growth stocks into value stocks which are cyclical and more closely connected to the state of the economy.
Last week the Fed Chairman Powell said that the economic reopening could cause inflation to pick up temporarily. He pledged not to raise interest rates even with the uptick of inflation. The stock market took it as an excuse and crashed the NASDAQ to down more than 10% from the 52-week high on Thursday. It made a lower low on Friday, but it
