I received some emails this morning from members asking me about the continued weak price action. Very little has changed in my view. As I’ve said since April, we will not see any SUSTAINED upside until the Fed is done with this rate hiking cycle. One thing that has changed over the past 24 hours is that the Fed is getting even more aggressive with their rate hikes, as they are trying to fight high inflation. This will continue to put pressure on an already vulnerable market. In addition, I was surprised to see the Equity Only Put/Call ratio LOWER on Monday than it was last Friday. This tells me that we likely haven’t hit capitulation yet. The light positions I’ve taken over the past few weeks have failed to make progress and it’s honestly not worth trading right now. If you can stay disciplined and avoid trading, it would probably be best over the near-term. Again, of course we will see some bounces and countertrend rallies, but I prefer that members protect their assets for a healthier market, which will likely be later this year.
