By Lawrence G. McMillan
As we always warn subscribers, a forecast for the following year is more of an exercise in theory than practice. That’s because our indicators are short-term in nature, and we will always strive to be in synch with them. Having said that, the word “forecast” – as it pertains to the stock market – has never seemed as frail to me as it does now. That’s because the Fed’s action has taken center stage. While one might be able to predict the Fed’s moves (essentially to keep interest rates very low and to keep throwing money out of helicopters – even though they’re only throwing 75 billion per month out of the helicopter now, instead of 85 billion), I contend it’s very difficult to predict investors’ reaction to the Fed moves. As I’ve stated before, I have been officially predicting (via CNBC’s economic survey) that the Fed would keep easing and would not raise the discount rate. That has been a very accurate prediction. What I never imaged – because it has never happened in the past – was that the investing community would embrace this as a free pass to keep buying stocks at nearly every opportunity...
Read the full article by subscribing to The Option Strategist Newsletter today. Introductory 3 month trial subscriptions are available for only $29.
© 2023 The Option Strategist | McMillan Analysis Corporation