Just posted this on another board, as a possible scenrario.
I can only point to the speculation that may drive the next rally. Doubt it will last 6 month, though. Probably a few weeks when the bottom of this slide is reached.
Oil prices off the highs, Real interest rates not increasing and even falling, speculation that Fed not only may be less agressive, but may even stall the rate hiking campaign.
Right now the biggest concern is that the economy is slowing, as consumer confidence is pressured by higher oil and the Fed keeps hiking. I heard a lot of people on CNBC today worried that Fed may crush already slowing economy by continuing hiking rates. I think the Fed is very irresponsible, but not THAT irresonsible.
There will probably be a lot of screams for the Fed to stop over the next week.
Then the speculation will emerge that the hiking campaign is coming to an end, and the Fed will probably signal, that they aren't worried about inflation that much anymore, as dollar appears to have stabilized and commodities are pulling back a little, and wage pressures are non-existant.
That will be a great excuse for a distribution rally. I think it will start slowly and accelerate by the end.
As soon as the Fed signals that they won't tighten anymore dollar will resume its slide and commodities will heat up again. And then of course there are deficits and debt. But thats another story....
Just my 2 cents :)
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