More Evidence of a Major Low Forming

The stock market has been on a rough stretch the past few months. Most of the groups I’m in and newsletters I read have become very worried. People are talking about recession signals like the inverted yield curve and the high interest rate environment being bad for the economy. The fear and greed index is in extreme fear and investor sentiment is the worst it’s been in 5 months.

I read a quote the other day from Mark Twain which sums up this current environment, “when you find yourselves on the side of majority, its time to pause and reflect.”

So keeping that in mind let’s look at the markets and reflect on why the majority will get it wrong again.

Despite all the negative talk about the economy the reality is very different. House prices are making post pandemic highs. The jobs opening report came in and surprised to the upside. Companies earnings are going up. We are starting to see IPOs again and the government continues to spend recklessly. These are all signs that the economy is healthy and there is plenty of money being pushed around out there.

On top of that if we look at the what the price action is telling us here we see signs of a major low forming.