The only problem with expecting an interest rate increase is that in this part of the cycle, interest rates aren't increased until the economy gets strong enough to press on manufacturing capacity and at that time it is humming along well enough to push the market even higher. Normally, we don't see the cycle top in the market for several months after interest rates start to climb. Otherwise, I think only even higher oil prices or a shock of some sort would be required to make the short side a logical bet.
Exactly.. thats what the FED is trying to do. He wants to be sure that when he does raise rates it wont hurt the economy because he is assuming the economy will be picking up which will offset the increase in rates. Major problem is lack of employment which is the dominant theme. But like u said the key word is "normaly."
So "this time it is different"? Also, employment is a very lagging indicator. Job creation doesn't occur until we get further into the recovery. It is the last indicator to rise, usually signaling that we are close to the end of the expansion. But, it's your money. Good luck.
I am not an economist nor do I trade the market based soley on econometrics.. the most important thing to me is price and volume. If i tried to trade the market soley based on economic theory I would of gave up a long time ago. The only points I made was that rates are gonna rise soon and employment stinks.
Marty Zweig did a thorough study of rate hikes - he concluded that the market didn't stumble until after the 3rd discount rate hike.
Oh I didnt really consider Naz. Yeah I guess you're right, I think Naz is honestly a joke in regards to valuation and I can totally see it plunging or at least selling off just because it's kinda full of crap. Seems like money is leaving Nazdaq toward more solid companies in this rotation. Shorting 2100 level is a good play.