Market Log: 7/1/2022 - Fed funds futures curve inversion accelerates

I'm not a contrarian, but you ever notice how the market is kind of ... sadistic? If you look over at /r/stocks and other big name subs the Atlanta Fed GDP prediction has come out. A recession is official to the average investor now, and if not now it will be the talk at bbqs for the 4th and around the water cooler at work. This is the perfect time for the market to go up and look like the bear market has ended. It's the perfect time to get a bunch of people to short then get short covered, then have them get confused once the market stays up for a while. It's messes with people's emotions.

I wish it was that simple as just a sentiment analysis, or simply being a contrarian, but it's not that simple. Sometimes the market throws the average Joe a bone typically right before something bad happens. In 2021 people all over Reddit were celebrating successfully buying the dip at the bottom that one day. It scared me, but I couldn't rationalize it. I knew something was up at the time, but I didn't see any signs of the economy faltering, nor anything from the Fed. Turns out the Fed had mentioned its plans not at the FOMC meeting but in its meeting notes something like a week earlier. I missed it, but industry leaders who caught on were slowly exiting. Meanwhile this convinced the average Joe that they could successfully buy the dip, months before the beginning of what we're seeing now. They threw the average person a bone just to take advantage of them later on.

I don't know causation. It sounds like a conspiracy theory to me. Big banks just fucking with people. I have no idea. But I do see correlation. Usually when the average person is on the same page, sometimes they succeed for a little white to get a taste and then they get ripped, or sometimes they get ripped right from the get go. It's backwards from common sense. Everyone now knows we're in a recession. It's the perfect time for the stock market to rally for a month.

/r/VolatilityTrading Thread Parent