Monday, April 18, 2016

Could see a further bear market rally because of the Fed

I would expect at least one violent countertrend bear market rally, perhaps over late Q2 or early Q3, taking the S&P from the 1700's (if I am right!) up into the 1900's before the leg lower into the 1500's over late Q2 or most likely Q3.

I am comfortable that such a period of positive counter-trend price action for risk assets will NOT be based on material and sustained improvements in global growth or earnings, rather the drivers would still be hope and a strong view that the Fed is actually going to ease (i.e., action or promises of action in the dovish direction rather than just words or promises not to hike).