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I think it’s the bottom

Dearest regards,

The earnings compression that should follow the Fed moves to control inflation hasn't happened yet, which the market knows. After the Q2 lukewarm earnings, the market went bullish on sentiment. But as the recession pain sets in, companies have to report weaker earnings, lower dividends, lower future income expectations, hiring freezes, etc, and all of that has the potential to whiplash stock prices if this happens to a greater extent than the market anticipates.

Maybe that hasn't happened yet in full swing. At the current stage we've only given back the bullish last few weeks, to reset back to the lukewarm earnings season around end of July.

So anyone (such as myself) that think today's prices are the bottom, are basically saying

  • they think the Fed has inflation under control
  • fed is gonna nail the "soft landing" exactly how the market expects
  • companies are going to have a profitable end of 2022
  • no lowered guidance beyond what the market expected.

I have wayyyy OTM QQQ and SPY calls for 2024.

Submitted September 08, 2022 at 01:35AM by L0LINAD
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