We had Microsoft, AMD and Google report earnings last Tuesday.  They were underwhelming, not good enough to justify the high stock valuation.  Then the Fed put cold water on March rate cut dream and the market responded negatively on Wednesday trading.  Somehow the market knew that Meta and Amazon were going to have a great earnings report so the market bounced back last Thursday.  Meta and Amazon reported earnings after market close on Thursday.  Meta and Amazon did a great job on cost cutting and returning to revenue growth.  They sure earned the hearts of Wall Street.  Meta stock jumped 20% in one day, the biggest jump Meta’s history.  Apple is not getting the love.  iPhone sales in China is under threat.

Meta also announced $50 billion stock buyback and paying first ever dividend of 50 cents.  Besides Tesla, the Magnificent mega tech earnings are not bad.  The economy is doing well with strong employment data.  But, the stock market has a funny way of fulfilling the cycles.  In other words, everything looks so good, why would stock market fall to make a cycle bottom?  We are still on the hunt of the 4-year cycle bottom.  The current 4-year cycle started in March 2020 and a valid 4-year cycle bottom hasn’t occurred yet.

Underneath all the good things, the regional banks are suffering from lending in commercial real estates, the start up companies are not getting funding as the VCs have dried up.  What about the things we don’t know?  It was all good right before Covid hit the stock market in February 2020.  At that time, the stock market has priced in all the good things and a 4-year cycle bottom was due, but it seemed nothing could have taken the stock market down to make the 4-year cycle bottom then.

Covid came out of nowhere and the Covid stock market crash finished the previous 4-year cycle.  We could have a similar situation playing out this time.

We are certain that the October 2023 low is not the start of a new bull market.  The monetary condition has not changed since July 2023 to today.  The Fed is on pause, not easing.  As inflation comes down further, the monetary condition gets tighter because the real rate (interest rate minus inflation rate) is getting higher.

Will the S&P 500 try 5000 before retreating?  This slow bullish boat is killing the shorts.  Does the market ever go down?  The market goes down when the last buyer has bought the market.  Zero buyers will push the market down.

We are not there yet.  Everything takes longer in the stock market.  Even though we are looking for a quick stock market bottom, we are bullish long term.  This decade will make us a lot of money because of AI.

Below is the S&P 500 daily chart.

It is 2 days into the current daily cycle, 14 weeks into the current weekly cycle.  The post Fed meeting low created the 3rd daily cycle low in the current weekly cycle.  Now the S&P 500 is on its 4th daily cycle in this weekly cycle.