Bull-Bear Battle Royale

Bull-Bear Battle Royale

(8/15/22) Markets are very bullish on a short-term basis, and are set to test the 200-DMA; that's hard to believe with all the negative economic data that's currently about.

Think that's weird?

Markets are markets, and they tend to lead the economy, rather than lag.

But it's way too early to determine whether markets are telling us the worst of the economic downdraft is behind us.

If markets continue to advance, a pullback to support would then provide an opportunity for more equity exposure short-term.

Much will depend upon what the Fed does, and the Jackson Hole meeting later this month may provide a clue.

Economic data remains very weak, supporting the bearish case that the Fed's not done yet.

Inflation is not going to come down from the 8% range this year, and the Fed is not reducing its quantitative tightening anytime soon, which has helped support stock prices for the past several years.

The bears, therefore, have a good case as Fed liquidity begins to come out of the market at some point.

So, short term, markets are bullish, but over the long haul, the bears may return.