Broad Market Outlook
We are starting to see some of these bases that have been forming over the last few months starting to work themselves higher. Just when "recession fears" (a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters) were at its peak and most were thinking the market was going to crash, the market for now has seemed to find its footing and may want to inch back higher, as my outlook is that we are back at highs in 2023.
Now the recession fear is an easy headline for most to latch on to, but we forget the contexts.
Just like a stock that has increased 30% in a week, it needs to pull back and set back up, people are quick to fear a recession, yet its two successive quarters where GDP falls, after the run GDP has been on, a little breather should be welcomed or better yet expected, not feared.
Yet investors are not a rational crowd, nor is any crowd for that matter. That is why you need to drown out the noise of all the fear you hear from the crowd on a daily basis. Try this simple experiment next time you come across someone who mentions how scared they are of a recession, ask them "what is a recession?" and sit and wait patiently for there answer, trust me they won't have one.
Now we are entering into one of the slowest periods of the trading year, end of summer trading, last week I was zipping around Italy on a Vespa, Shake is out in Ohio racing goats on ATVs, Heaven is racing Ferrari's around south beach, Jun Moon is buying Hermes Birkin bags in Paris and Django is hanging out with baseball legends in a house that looks like a scene out of the classic movie Roadhouse. Most of us right now, most of the crowd as well, are away from the screens.
Volume will be light, trading will be wide and loose. If you have an A+ idea, always take it but if you find yourself trying to find something to do, get outside and try something that involves direct contact with light that emits from the sun and not your computer screen. Before we know it the summer will be over, the kids will return to school and trading will pick back up. The only burning you should be trying to do is getting sun burnt, not burnt out of trading during the end of summer trading.
From Bennett
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Macro Rotation Outlook