Market On Close - Wednesday 16 August

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.

Burry 1, Retail 0

With a much-reported short campaign, amplified in meaning and in quantum by Twitter and various serious news outlets alike, a certain Mr Burry has captured the zeitgest rather nicely.  Stocks which as recently last month looked like they could Only Go Up now look like maybe they Could Go Down A Lot.

If you've been following the charts we post most every day in this service, hopefully you can see that markets are following a normal ebb and flow pattern.  The indices went up a lot, and quickly, from the January lows and March re-tests of the lows; naturally they will let off steam a little now.

Anything can happen of course, so it's possible that markets just keep selling off, 2022-style, but we don't think that's likely.  Our long term bull case is based on these pillars:

  • US GDP growth appears to be accelerating, according to the Atlanta Fed.
  • Inflation appears to be coming down, according to everyone other than David Einhorn.
  • Fed-speak leans neutral to dovish, probably because ...
  • ... there's a Presidential election cycle getting underway.

The Good Stuff

For our paying members only let's now walk through the shorter- and longer-term outlooks for the S&P500, the Nasdaq, the Dow and the Russell.

We include more detailed Cestrian staff personal account trading plans in our charts - these are disclosures rather than commandments, we include them to (1) clarify our own thinking and (2) to help explain what we think about the direction of markets. Paying Inner Circle members can reach out in Slack anytime to discuss.  You will, of course, make your own decisions as to how to use our charts in your own work.

If you've yet to sign up to a paying plan here, you can do so right from the link below.