With the Fed raising rates last week and the market reacting negatively, we thought it would be a good idea to update our crash comparison charts for SPY, QQQ and XHB.
Let’s start with SPY:
And QQQ:
And finally XHB:
Virtually all crash patterns are similar and we expect the post pandemic crash to follow those patterns as well. The Fed has announced that it will keep raising rates until inflation is under control and the market may finally be taking the Fed seriously.
Raising rates also presents another problem, why risk money in stocks, real estate or other speculative investments when government bonds are paying upwards of 4 percent or more return? All other investments will now be forced to compete with government backed bonds and that will roil markets even further once the real panic sets in and we think we’re almost there.
Stay tuned, stay profitable and stay solvent…