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Markets Game

⊰ 2022-08-19 by ShaunO ⊱

A lot of 'jaw-boning' that we're at a 'pivot point' again. Why? argument goes either:

1) it's the start of a 'new bull run' (after June22 lows, strong employment, FED won't hike as strongly as anticipated, companies will maintain margins by price lifts, we've hit peak inflation, we've already climbed above 50 day MA therefore bull likely to continue)

2) we're in a 'bear market bull run' (you can't make this stuff up can you? meaning it's a temporary lift and will return to bear, downward, market trend imminently)

First pic. is ASX200 showing 50 day moving average and a linear regression (LR, +/- 2 standard deviations) over ~360 months (back to circa 2016). Second pic. overlays the actual asx200 back on top.. Picture says LR 'target lands' around 7200 and we're not far off that.

Personally I'm on 2) and the narrative is roughly the opposite of what I quoted in 1) above.. Inflation will persist, wages will rise 'behind' that adding to it, central banks will continue to be aggressive through EOY 22 at least, inflation will begin to eat at margins (maybe not till 23 though), retail spending will wane as 'savings buffers' run out and debt burden begins to climb, geopolitically uncertainly remains in mix..

As usual, who cares what I think? :-)

With current 'signalling' it wouldn't be unreasonable to have a 50/50 bet either way, or you could just lick your finger and hold it up to see which direction the "winds a 'blowin"..

buggered if I know (but it's fun speculating) :-P

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