I really feel like one more bloodbath is in store. One that triggers some stoppages in major indexes. Only thing we are missing is the panic selling.
Could be wrong though, markets could drop another 40% and before hitting historical averages. They would have to get cut in half again to hit prices in the early 80’s when inflation was last this high.
I’m not sure we see a big bounce and rally like the last two big sell offs. During Covid and the financial crisis the sharp v recovery was marked by the FED dropping rates and taking on rapid expansion only money supply. FED can’t do that this time because of inflation so this may just continue to be slow motion disaster.
My best guess is we see some sharp up and down bounces before we reach a point where markets start to consolidate sideways on a key support level and then get a big rally. I’m really uncertain though. If inflation doesn’t slow and supply chain issues don’t start to ease, equities are going to be tough.
Tesla has weathered the supply chain issues better than anyone but they had to stop production due to a lack of wire harnesses. That’s a really bad sign.