The Next Shoe To Drop

Waiting for it?

Lets start with this. With all thats been going on:

  • 40+ year high inflation
  • First real rate hike cycle in 40 years
  • War In Ukraine
  • Growth rolling over
  • Record high Gas Prices
  • and more

There is always an excuse to sell. I mused over the years that excuses to sell were actually a reason to buy... why? The FED has your back. Not anymore. Interest rates are breaking out of a 40+ year down trend.

Last night SNAP released earnings with no guidance. They have no idea what lies ahead. And yet the market this morning is almost green? Wild.

Its been a tough slug the last 6 months for bull and bear alike. If you took all the headlines, the rate hike expectations, the soaring inflation, and told me about it when we were at some $480 on the $SPY, I'd wonder how we aren't at $300 or less on the $SPY.

There are really two paths I see.

(1) The bottom is in. The FED is going to hike .5% and the economy is going to keep rolling over/ along with prices. Stocks have bottomed. Interest rates have topped. Inflation rolls over and the talk turns to deflation as crazy as that sound. Stocks move higher. In 2023 the S&P500 makes a new all time high. (not many see this)

(2) We have a long way to go. The bitcoin infused blow up for 3 arrow,, Celsius and the other crypto names is just the tip of the iceberg. The Bear Stearns moment. And in 3-4 months or less stocks will take the next leg lower?

That's the next shoe to drop. Higher interest rates, higher cost of capital is going to take down a lot of companies in 2022.

And yet here we are. The S&P500 is hanging in there.

What is the next shoe to drop?

The open is coming, but this will be continued

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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