The Second Leg Down Part 2

Bank of Japan Joins the Rate Hike Party

A BRIEF RETEST OF 3915 ES IS STILL POSSIBLE

cool algo at the bottom of this article

Review from PART 1 (reread if you need to)

Earlier this month, Part 1 outlined risk-off behavior in the markets, I gave a brief description of the Covid Crash, how it felt each day leading up to it and called for a 2023 Year End crash into January. We are in phase one of a crash, which can be very deceiving…it makes people buy the dip, thinking we go higher.

WHAT MADE US SELL OFF?

On Dec. 14th, Jerome Powell Raised rates by 50BPS and guided up for 2023 which means that interest rates will be “higher for longer”

Not what bulls wanted to hear…especially after a soft CPI report…was his decision a policy mistake?

I believe so.

Bank of Japan

Last night, Japan tightened its monetary policy for the first time in 6 years and caught nearly everyone off guard. See people would borrow money in Japanese Yen for 0% and use that money elsewhere for a return. They are closing that window. The last central bank to hike r…