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02.01.2023 – WEDNESDAY MARKET OUTLOOK

Market Outlook
 

The bears keep getting it wrong. They are in unison convincing themselves on social media that this market is just a bear market rally and they refuse to accept that the market already adapted to the new FED policy. That is why the markets have big selloffs but reluctant rallies. Investors become bearish and skittish very fast and they sell everything very quickly. But they refuse to believe that the market has changed and they still believe in the bearish narrative. I must admit, I fall into the opposite category. I am a perma-bull (thanks to my long-term view) so admitting that the market has changed is difficult for me too. But I still see this bull market intact and this bear market was just a small cyclical bear within a secular bull market.

 
Market Outlook
 

Today, we got the news from the FED. They raised the rates by 0.25 points as expected. The market sold off in the morning in a knee-jerk reaction which turned violently bullish after news reporters pressed Powell on being too aggressive after which he admitted that the disinflationary process has begun and is improving. As soon as he said that, the markets skyrocketed. All the bears became suddenly bulls.

 
Market Outlook
 

The Ichimoku chart clearly shows a very strong bullish trend (which is now due for a pullback, so if it happens, be prepared for all the bears coming out of their holes). The market was volatile, exactly as expected. Tomorrow, I expect a zig-zag move. I think the market will sell today’s rally but it will probably recover it by the end of the day.

 
Market Outlook
 

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