The much anticipated Fed’s Jackson Hole Economic Symposium came and went. The market took it as a non-event because Fed Chair Powell was dovish as usual. Powell mentioned that taper is coming but interest rates will remain low for a long time. The next Fed policy meeting is September 21st, which is about three weeks away.
The market bounced back strongly last Thursday and Friday. Can you trust the bounce? Yes, we believe this bounce is trustworthy and indeed a good buying opportunity. The bullish fundamentals (monetary and fiscal polices) have not changed. Yes, there are scary talks about inflation, but the real inflation is not here yet.
Last week the entire nation was gripped by the violent trading in GameStop stock. The volatility in the most shorted GameStop stock was super high. In the last six trading days, $GME stock traded between 42.32 to 483 defying the fundamentals of the company’s business. There are noted hedge funds took loss and covered the short trade, but
The DOW met 31200 resistance last week and the weekly cycle oscillators promptly turned down. Even though the last week’s low didn’t penetrate the previous week’s low to produce a swing high, but the mere fact that the weekly cycle oscillators have turned down is enough to call this weekly cycle top in place.
The year of 2020 has been proven to be nauseating, the amount of churns feels like being thrown in a washing machine on the spin cycle and not able to turn it off, between COVID, BLM, Election and the markets. However, the market has been unemotional and faithfully carried out the cycles and is pointing to a clear path forward from here.
