quoting myself from april: "finally come here to give my guess how this might go down: So if May is a high in the Russel2000 , nasdaq potentially high in june, if we get this setup, then from there i expect a crash into August in Russel2000 and maby September in Nasdaq" d
So now its June and we did get the high in the Nasdaq! :) First part of my prediction correct, now will we get a correction/crash and when? I think the economy of USA and other countries(germany,sweden and more) will slip into recession towards the end of the year, and i think some stocks will price that in, the problem is, rates will also come down as i expect inflation to come down. So i wouldnt look in growth stocks for problems, rather in the Russel. But the russel2000 kinda has priced in a recession by making new lows in May when measured in Swiss Francs and staying at its lows in USD for 6 months~ so i wouldnt short it either, people are already too bearish on the RUT russell2000 index So then i wouldnt be surprised to see corrections in price in many stocks from June highs down to July or August/September/October lows And how i would invest here in June 2023 is, just wait in Bonds but this time not short term bonds, rather instead taking the currency risk and the duration risk as now yields are very high, so choose something like a 2y-5y Bond and then continue to sell it at a profit if an attractive buying oportunity develops in a stock that i like, sometime from July-November Then 2024 i expect to be a great year, where people will invest based on the belief that liquidity gets injected, and it probably will be. And i think returns will be good. So this is really the last chance to pickup assets for a good price, when they price in the recession more and more as we head towards the end of 2023. But like i said, rates will come down, so growth stocks might be repriced higher because of that. But other stocks who see actual earings declines continuing or get close to bankruptcy will be pricing in the recession more. Also many market participants will be surprised that the central banks are not stepping in, not printing money, rather prefer to watch the recession begin in ernest and focus on lagging inflation metrics. In Junk Bonds id expect to have a good chance to see their yields spreads (difference between US treasury yields vs Junk Bond yields) rise. And of course im gonna buy the next correction in Crypto sometime in July-November 2023 im a buyer, as i was in 6. January 2023 (expecting the market to anticipate a Fed pivot to a pause) So im officially putting a Bond trade on. Buying half 2y Bonds and half 5y Bonds here in 4.June2023 But lazy to do the math for those paltry returns. |
AuthorPascal |