I am about to make some bold predictions, so there's a very good chance I will be wrong. However, I am making these predictions based on the chart patterns I'm seeing, so please bear with me if you are not a chartist.
Now the reason why I am using charts to make the argument for me versus using fundamental is that for the fundamentalists, the story has been the same all along. The problem was figuring out the timing.
We knew all along that tech stock valuations were elevated, value stocks were being ignored, and energy stocks continued to trade well below the current implied oil prices. These are all fundamental stories that are easy to explain, but the problem is figuring out when this all changes. This is where we have to turn to the charts. We have to let the market paint the story for us and the path forward and based on everything I'm seeing, this is the final leg, so chaos is coming.
What is this chaos we speak of?
Tech stocks are headed lower.
Inflation is going to roar back versus the market's expectation that it has peaked. Service inflation is much stickier than expected. Rent increase is finally starting to show and when energy prices roar back, inflation is shooting higher.
The broader market is going to decline further as the Fed has no choice but to keep hiking rates.
Energy is set to massively outperform tech despite worries of recession.