Retracement

 - Whatever goes up, must come down = Gravity.

- Isaac Newton

Recent Market

It has bounced. It still has not touched or breached the last high. We, at Evolution say it has run out of gas. The Federal Reserve will make its annoucement later today. It does not matter what the hike becomes, as long as they show a committment to continue to fight inflation. The only thing that the Bulls will view is the outlook. Will they pivot in March? In any event, King Dollar should also end its decline. It should bounce. Together, these points will cause the market to pause, reflect. This points to a possible consolidation period leading up to the March Fed meeting.

Meanwhile...

The market continually hears big firms laying off people. Newell and Coinbase join 3M and a host of teck companies that are issuing pink slips. Bankruptcies are growing. You can add Serta Simmons for an appearance in court. At some point in time, this has to be added to the market's thinking and price action. 

Then, the ongoing debate over the debt ceiling. Dear Reader, there is no debt ceiling. Our leaders only know one thing, SPEND! Their playbook says, "Add debt to existing debt. Inflation makes everything cheaper because we can always print more money." This is another reason why we say we need a new third politcal party with a platform that puts citizens first as in the constitution (promote the general welfare) and end all foreign entanglements. Speaking of which, last week the GDP came out. It stated that the economy grew by 2.9%. This is also misleading. Billions of those growth figures came from the military. We are running a military economy with ammo, weapons, drones, etc. No one is buying cars.  Many of those who purchase a big item are falling behind on payments or they are overloading their credit cards. Not good.  There is one chart comparison that everyone should read, understand and keep in mind. It displays the last 20-years to the present.

              Last Two Decades                                                               Today                                                 low interest rates                                                                    higher rates                                                     high stock P/E ratio                                                                   low P/E stock ratio                                     Buy theDip                                                                                Sell the rally                                                Risk-On                                                                                     Risk-Off                                                      Innovation - no worry about profits                                          Seek assets that generate cash                    Stocks rule                                                                                 Bonds and Commodities                            growth firms                                                                              value firms                                                  Institutions move the market                                                     Retail influence returns                              Market depends on economic policy                                 Ideology influences economic policy.

Today's Fed action and outlook will have a hold on the market until their March meeting...Peace