If there’s one salient lesson I have learned in my life it’s that most people are completely wrong most of the time, especially when it comes to assessing the importance and future outcome of current affairs. I know this may sound somewhat elitist but it’s an all encompassing observation I have made on numerous occasion in my life, and as such it has become a core tenet that in year’s past has saved me from financial ruin many times over.
If you are new to trading then you may be wondering what all those red candles mean you suddenly keep seeing all over the place. Well, let me tell you a tale of a long forgotten place and time when market corrections were a regular occurrence and served to prevent excessive greed and hubris to prolong for more than mere fleeting moments. The rare times it happened were feared by all but then quickly ignored and soon forgotten nonetheless. This cyclical ebb and flow of the financial markets worked well for a few centuries until one day back on September 15 of 2008 when the Federal Reserve decided that market corrections were a thing of the past and thus henceforth were considered ‘verboten’.
It’s finally official: Inflation is out of control with last week’s consumer price index (CPI) reporting a jump to a whopping 7.5%. This is the fastest surge in the past 40 years but let’s not kid ourselves, that is AFTER the numbers have been thoroughly massaged and finagled to look as rosy as possible. The truth is most likely much more dire. I personally would pin running inflation at 10% or perhaps as high as 14% simply judging by fuel prices as well as basic cost of living expenses which continue to explode higher.
When I started this digital den of market domination in early August of 2008 I could not in my wildest dreams have imagined the decade long bull market that would end up grinding even the staunchest of perma-bears into the ground. Of course none of that could have ever happened without a little help from our friends over at the Federal Reserve. The now commonplace axiom of “don’t fight the Fed” had not yet entered our contemporary vernacular and thus many reasoned heads first had to roll before the market embraced a new paradigm driven by quantitative easing and various FOMC operations aimed at painting an infinity-put under the equities market.