Similar to the buzzy intrigue behind the mashup viewing of the tonally different Barbie and the Oppenheimer movies, the market is rallying to its own oddball double feature: higher interest rates and economic uncertainty.
It feels as if buyers are crazed, even as the Federal Reserve is set next week to raise interest rates a quarter of a percentage point, marking the 11th time that the central bank has increased benchmark interest rates after pausing in June to assess the inflation backdrop.
In large part, that is why he’s calling for sideways action or a possible retreat of about 3% for the S&P 500 SPX to 4,400. “Right now, we are in a melt-up,” he said. “And Rule No. 1 about a melt-up, don’t short a melt-up,” he said, referring to making bearish bets that the market will fall soon. Useful signs to look for will be decelerating market pricing and then reversing coupled with trading volume picking up as stocks slide.