E-Wave for the S&P 500 Index

[gdl]

The Chart has a picture perfect recovery here to establish a new wave up. Hit almost exactly support and bounced. It is now up to the street to determine if they no longer care about inflation. Perhaps they see resilience in the consumer with added borrowing and wages? One Fed Governor opened his mouth last week and declared over his dead body will they raise rates 50 basis points. We have a brutal economic calendar over the next few weeks. if it comes in as expected we should rally thru this month. Jobs, Jolts, CPI, PPI will determine if the street has factored in higher inflation or on the off chance we see a slowdown in inflation. Now if you base it solely on earnings and projections this market is already at very high valuations and needs a near perfect scenario to pull it off. Estimates have gone down, not up as of today. A 6% drop expected in Late April/early May quarterly announcement and another 4% drop for the quarter after. We are already at 18 plus P/E. Doing the math if over the next 5 months we rally 5% from these levels and drop 10% on earnings that places a P/E ratio over 21. So a market at ONLY 4275 with an expected drop of 10% earnings hits 21 P/E. This is ONLY if the price of equities rises just 5%.

The valuations are INSANE projecting out. I mean project 6 months or even 2 years out. You would need for disinflation to take hold as it has in the recent past and at a pace that is steep.

Lets add China to the mix. Impossible they contract over next 6 months as their lockdown was recent. Latest data showed the same result as we had when we got out of lockdown. The Chinese is NOT going to add stimulus to the problem since they know just how inflationary it is. BUT the Chinese have been cooped up longer and with very strict consequences.

Commodities should be the first sign of a spiking inflation again. the dollar should exceed 110 if the stock market stays afloat. 10 year yields should easily hit 5% this year and possibly 6%. Housing will determine when this bubble bursts.

A PERFECT STORM for run-a-way inflation this year!

The FED FUNDS will hit and exceed 6% this year and depending on when we CRASH it will stay above till then. There is zero other options.

Based on The Crypto Trader this current rally should stay in a pocket between 4070 and 4110. 4160 is the absolute top (IF) his projections are correct. His track record is the best i have seen on Bitcoin. He uses SPX as a correlating chart.