Will This Bull Market Please Let Us Have One Big Pullback?
Jani Ziedins | Jun 17, 2021 12:02AM ET
Wednesday was a choppy session for the S&P 500 as the Fed spooked investors with suggestions of higher interest rates by late 2023.
This accelerated the timeline a bit and convinced some people to hit the “sell everything” button. But as has been the case all year, the selling proved to be fleeting and the index bounced off the midday lows.
Should we be worried about higher interest rates 30 months from now? No, probably not. And that’s why the market’s reaction was fairly subdued.
Maybe we are the lobster and the Fed is slowly raising the temperature on us. Or maybe the Fed is the lobster and the economy is slowly raising the temperature on them. Either way, these things are still a long way off, and as nimble traders, we respond to what is directly in front of us.
While I don’t think any of this really matters over the near term, the market has never once cared what I thought. So I erase “what should” from my mind and replace it with “what is.”
If traders shrug off these headlines on Thursday, everything is already forgiven and forgotten and higher we go. But if the selling continues and knocks us under 4,200 support, few things shatter confidence like screens filled with red.
While I don’t expect anything from Wednesday’s headlines, I sure would love to see this turn into full-on panic selling because that creates a far more interesting (and profitable) trade. Unfortunately, I don’t think we’ll get that lucky.
Until further notice, I’m holding for higher prices. A market that refuses to go down will eventually go up…..
The ex-darling Zoom Video Communications (NASDAQ:ZM) has been staging a stealth comeback over the last several weeks. I have been telling premium subscribers to keep an eye on this bounce since reclaiming $300 support and now the stock finds itself 20% higher.
And this doesn’t look like this is the end of the run either. Expect this thing to keep chugging back to $400.
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