Market On Open, Monday 13 January

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Is It All Over?

by Alex King, CEO, Cestrian Capital Research, Inc

Whoa! Who ordered bear?!

OK let’s just get level-set here.

1) The market is crashing because the economy is too strong (evidence, payrolls) and we are going to see a resurgence of inflation (evidence, oil and bonds) which means the Fed is going to have to hike and that is bad for equities (evidence, equities).

Alternatively (2) The market is crashing because the economy is too weak (evidence, jobs - specifically, yes jobs are up but also more people are working more than one job, and even then credit card deliquencies are reportedly on the rise) and that means the Fed has kept rates too high and that means earnings are going to fall in a deflationary bust.

Yep definitely one of those.

Or maybe (3) it’s just a correction to close the post-election euphoria off, specifically to scare out recent overlevered late-money bulls so the grownups can scoop up their margin-called positions at local lows.

Let’s go see which of these it might be.

Short- And Medium-Term Market Analysis

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