E Market Briefing For Tuesday, Mar. 23

Reflections on the one-year anniversary of what I termed on March 23 last year, as 'The Inger Bottom', are sort of important as we reversed our bearish (since January 2020) stance to bullish as others panicked.

And although target levels have been reached or exceeded for virtually everything in rolling phases, the psychology of this move as expressed by most analysts is suspect. While I have called for 'The Roaring 20's', many months ago before others, I need to emphasize that the market is anticipating the strong economy and may not move in lockstep with the future robust economy. Initially yes, but later on not necessarily. Really a lot has been priced-in (discounted) by the big cap advances. Rotation can stave-off a more serious decline; but perhaps not indefinitely.

The Fed is sort of lost in terms of policy; and seemingly has no choice but to remain accomodative to the extreme, if they want to avoid being blamed for a possible market crash down the line. It's why everyone watches the 10-year Treasury like a hawk, and the averages do respond to the minor moves. So, while I don't disagree that it can creep over 2% without impeding growth (that is for sure still very low level), I don't concur that markets must stay sanguine. So keep an eye on that but don't overthink it.

If you noticed CNBC today observing the one-year anniversary of the bottom, they spoke about how 'everyone was in panic and fearful that day'. Hardly we say. The day before the Federal Reserve made their support evident and we thought that was a set-up for turning the market. It was not merely stimulus package hopes that some pundits focus on; because they forgot about how crucial Fed support was at that time. (Tina.) On March 23rd you had panic on the airwaves, and I thought that was the precise bottom. It was. My view was that you would not see the S&P at lower levels, perhaps for many years to come. And you did not and will not see that.

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William K. 2 weeks ago Member's comment

Interesting article indeed. And just watch and observe what happens when emotions and crowd following replace rational thinking. Fear is one thing but greed does not tend towards wise thinking and self preservation. So greed and panic are the problem sources. Which emotion is driving the federal reserve bankers is not clear, it may just be serious brain fog. That doe happen to folk on occasion.