Low VIX Belies Wall Street Stock Confusion
Earlier this week, I talked of a new "strategist short squeeze" on Wall Street.
The idea is simple: The recent melt-up in US equities was effectively endorsed by the Fed last week, which means anyone predicting downside for stocks in 2024 (i.e., anyone whose year-end target for the S&P 500 is lower than current spot) is at risk of falling behind the curve.
As ever, bearish forecasts have the potential to make their owners appear as geniuses in the event of a severe drawdown. But the risk w
OK, so what if all the 4800 and lower predictions for 2024 are wrong, where will we be? Or … what if they are right?
are we at the official point of ‘monkey, darts, and target’? – not claiming these smart people making calls are monkeys, but seems accuracy probability similar … either way, traders 2024 looks very, very challenging (if luck is discounted). Happy I don’t play that game these days.
Money supply is still growing and I don’t see an end, or even a slowdown, to that over the next few years.
The Fed wants to steer the US economy (increasingly dependent on debt/increased money supply) through the narrow strait between “too high” inflation on one side and “too high” unemployment on the other side.
It won’t be a straight line (is it ever?), but I don’t see anything that will pop, in 2024, the existing stock market/housing bubbles.