A #MysteryBroker update overnight, the first since he recommended buying into the Russia invasion news. The S&P is down a bit since, still above the Feb. 24 intraday low. The West shunning Russian oil/gas was an unforeseen wrinkle. He again says stocks are "close to a bottom."
The #MysteryBroker acknowledges S&P 500 is in a "perfect downtrend" and not grossly oversold yet by standard measures. Yet with his sentiment composite close to levels hit near the end of corrections ion 2011, 2016 and 2018, indicators "sufficiently bearish" to enable a bottom.
The #MysteryBroker has high conviction US not headed for recession this year. The 3-mo/10-yr spread is the yield curve most crucial in indicating recession when it inverts and it's nowhere close. Of the last nine 15%+ S&P corrections, only three were soon followed by recession.
The #MysteryBroker sees crucial differences between '70s vs today. US not a net oil importer now, was 50% then. Inflation itself didn't spark recession, Fed trying to pre-empt and then chase inflation with higher rates did. Corporate profits capture inflation, cushion equities.
In summary #MysteryBroker says, "stock market is getting close to a bottom...may need one more swoop down before a sustainable 4 to 6 week rally ensues. But the last decline will not be a lot lower than the previous low." Still sees opportunity in some blasted hypergrowth stocks.
That's it for now. If you hate the #MysteryBroker stuff, just mute the hashtag, I don't need to hear about it. And remember how this all works...
https://twitter.com/michaelsantoli/status/1126487466540617728
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