People Are Still Bearish

19% off the lows, and people are still bearish.

Exhibit A:

I’ve seen a lot of bear market rallies. They are all hated, every single one of them, but none more hated than this one. Pretty much everyone is convinced that we’ll make new lows. Michael Burry is out there dumping on the market every day, mostly because of the meme stock resurgence. I’m seeing a lot of tweets like this:

Source: Twitter


Last week, I wrote that the bear market was over. Still believe that. I do think things will get a little choppy, since it seems like the Fed wants to raise rates above 4%. I’m not going to dissect all the central bank chatter, but ever since the 8.5% CPI print a few weeks ago, a long parade of Fed officials have said they’re not done yet.

Getting into the particulars, the Fed will probably hike 75 basis points in September (at the time of writing, there is a 60% chance of that), 50 basis points in November (right before the election), and then pause. After the election, the political urgency to raise rates will have passed. But maybe I am wrong.