Just when you thought markets have reached peak schizophrenia - not helped by the fact that the Fed wants to have it both ways, and "on the one hand calling inflation unacceptably high and inflationary pressures broad-based, while on the other they hinting at slowing the pace of rate hikes, thus allowing financial conditions to ease, well before there is any real evidence of a meaningful move back towards there 2% target thus leaving the market confused as to whether the Fed is likely to continue to raise rates well into 2023” - we now have a Heisenberg state for markets where one flawless, 100% accurate indicator suggests i) the market is set to to tumble and hit a new bottom, while according to another ii) stocks have already bottomed and will now soar.
In other words, we are about to see at least one of two "guaranteed", 100% correct indicators be wrong for the first time.
Why? Consider the following: last Thursday we first pointed out that 4220 is critical level for S&P futures: it's the 50% Fib ES retracement. A close above it would void the bear market rally thesis as there has never been a bear market rally that exceeded the 50% fib and went on to make new cycle lows
4220 is critical level: it's the 50% Fib ES retracement. A close above it would void the bear market rally thesis as there has never been a bear market rally that exceeded the 50% fib and went on to make new cycle lows pic.twitter.com/dZlXMi1fXG
— zerohedge (@zerohedge) August 11, 2022
Yesterday, CFRA's Sam...