Timing The Federal Reserve's U-Turn | Mark THIS Date.

socks are down for three weeks in a row

and in this video we're going to talk

about where is the federal reserve's

potential U-turn going to first happen

we'll talk about that in this video and

I'll explain my reasons why keep that in

mind though this is different U-turn is

different from a pivot where they sort

of reduce the level of rate increases

that they're handling a U-turn is where

is that potential full fed or good

that's what we want to try to understand

a little bit more of in this video I do

want to mention though while stocks are

down three weeks in a row and it seems

like every single day the only Movement

we see in the stock market is down down

and just gets worse and worse and worse

as we go through December and the tax

loss harvesting season here what does

that actually remind us of

well I don't know what it reminds you of

but it reminds me of sitting right here

in the same spot last year in November

of 2021 during the crazy euphoric bull

market and I'm looking up at Sarah Eisen

and you know what she said day after day

after day

new record highs on the S P 500 that

does it for me on the closing bell over

and over and over

well that's one week in a row of record

highs that's two weeks in a row

recognized that's three weeks in a row

of record highs now we're at three weeks

in a row of down down down down

and hopefully now hope remember is not

an investing strategy but hopefully that

means it's time to break the trend here

soon when we start seeing some green

when we get into January but and we are

not at record lows on the S P 500 or the

NASDAQ so keep in mind that is a little

bit different but that three week in a

row thing something I'm paying attention

to so

what's the first thing that we have to

know about the Federal Reserve to

understand what turned them dirty after

all we got two CPI reports in a row that

were bullish they came in below

expectations inflation's rotating down

this is great so what the hell fed why'd

you have to be so mean what'd they do

well what they did was they gave us a

summary of economic projections that

were a lot more hawkish than we were

hoping they would be specifically they

indicated the economy would be closer to

recession with GDP close to zero and

they indicated a substantially higher

fed funds rate than we were expecting I

was personally thinking they'd go to

like a 4.9 here and ended up going with

a 5.1 so pretty aggressive and some are

now thinking that the FED has gone so

far that the next summary of economic

projections could be the start of

signaling the U-turn so when does that

happen well it doesn't happen on

December 27th what happens on December

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channel so what do we have over here

well this is a kind of chart that I

threw together right now we're sitting

over here December 22nd December 23rd

right we're we're in a pretty uh bearish

environment right here I think we could

almost go ahead and just color this in

and say you know what December we

probably just have to write off as

painful but I made this a black mark

right here for January 1st to indicate

that I believe on January 1st we're

going to get something known as a

defeatism check and this is where the

era of tax loss harvesting ends right

here and we should hopefully see the

people who tax loss harvested start

buying back in in January that is for

those who tax laws harvested in December

some people tax laws harvested in

November though and they haven't come

back yet at least it doesn't feel that

way right so I believe January 1 and

really January through about Feb one is

going to Mark a defeatism check of

course these will be sort of touched on

or or uh you know these might move based

on the January 6 jobs data and January

12th CPI report but I think January is

going to be a big tell usually most

retail sells in December most retail

Buys in January and remember most of the

stock market gains for a year actually

happen between November and may of the

Year this is why the saying sell in May

and go away came up so this is going to

be a critical critical period here this

chart that I've drawn but there are some

reasons in my opinion to believe that

the color of the pain changes well I

have hope for January I have the most

hope that as long as we get a long

expectations jobs and CPI reports in Feb

1 we might start getting some hints that

if Jerome Powell were to remake his

summary of economic projections he might

potentially actually reduce them instead

of increase his projections that would

be a critical point for the market to

say oh wow this could be the beginning

of a Fed U-turn just like when we

actually get the next summary of

economic projections which occurs on

March 22nd mark your calendar for March

22nd the Stars here representing the FED

meeting

March 22nd is going to be very

interesting because we have gotten

summary of economic projection time

after time over the last year that has

done nothing but this it's gotten worse

it's gotten uh and we get like worse

there we go worse worse worse it's

always gotten worse

and March 22nd because they've gone so

high on this last SCP report that set

off this three-week bear Market here in

December they've gotten so high that

it's possible March 22nd we could

finally see that the inflection point

now that's too soon to say that's the

FED U-turn right the FED U-turn is

usually when the FED starts cutting

but markets could try to start pricing

in the actual fed U-turn If the Fed says

hey actually you know what we're

starting to talk about Cuts in 2023. hey

actually you know what inflation is

behaving better than expected wage

inflation is turning over right this is

the the hopium potential here and we

want to be careful that it might not

happen if inflation comes in bad we

could just continue to get more

aggressive SCP more aggressive SCP but I

don't think so because now leading data

suggesting Commodities next year could

be down as much as 20 percent we've got

a little bit of an oil rally here

happening today it oils up about three

percent which is not great we'd like to

see energy come down that permeates

through the entire economy but we're

better than where we were last month

we'll see if that can continue to Trend

down uh and we've we've gotten

suggestions that that rental inflation

is really going to give us downward

pressure in Q2 and Q3 in fact Goldman

and most forecasters are suggesting in

Q2 and that's April May June that's what

we're really going to see those moves

down in rental inflation JPMorgan

suggesting the biggest gap down could

actually end up coming uh in Q3 and

graphically from City that's kind of

what this looks like over here you've

got owner's equivalent rent going to the

Moon here but median uh sales prices of

existing homes and sort of rental

inflation is uh projected to rotate down

here within an 18-month a lag or I

should say the owner's equivalent rents

are expected to follow

either leading rental data or existing

home sales down by about 18 months and

so we would hope that by Q2 we get a

nice Drop Like This Q3 we get our next

drop down and that could be a big anchor

down for inflation especially since

shelter is about a 30 percent weight

about a 32 percent weight for CPI about

a 25 weight for pce we just had pce

numbers today that were you know kind of

at expectations and in some areas

actually slightly a little bit hotter

but we still haven't actually seen that

rental disinflation yet and so that's

going to be a big factor here so if we

can get this sep inflection point I

believe the market might try to start

pricing in a U-turn and that's where I

think we can get to a little bit of a

better Market starting really in Q2 now

can we get can we pass this defeatism

check over in January in my opinion

that's going to be critical will we pass

that defeatism check because if people

don't come back to the market then there

is this risk that people just resign and

Retail ends up selling and capitulating

that ends up marking the bottom and they

don't come back they do what my dad did

in 2008 right it's like November of 2008

that's it can't take it anymore sells

out is 401K at the bottom and never

stays part of the recovery look socks

are painful in the short term right they

go they go up like crazy then they go

down and you see your net worth go whoa

whoa like crazy it's insane

but in long term

everything ends up working out you know

as long as the companies you're

investing in don't end up going bankrupt

it generally just ends up working out

so I like paying attention to this we

can Mark some of these dates here but

what else do we have

we have something that's actually

playing into the fed's hand right now

10-year treasury yields are rising again

see this right here as of the fed's

meeting we've started seeing an increase

in the 10-year treasury I actually have

a belief that it's quite likely 10-year

treasury yields are going to stay around

three and a half percent for quite a

while that would actually be more like

right there they'll stay around that

level or above there for quite a while

and this is why I've started closing

some of my dollar short positions

because the dollar short works really

well when treasury yields plummet I

don't know if we're going to see those

low treasury yields anytime soon at

least not until the Federal Reserve

really starts cutting and even then

think about it if we don't cut until the

FED gets to 4.75 we're still well above

the 10-year treasury yield here right

the FED could cut a whole percent and

then we're still just in line with the

10-year treasury where it is now and so

my expectations are that leads to more

pain for the real estate market so

actually if we jump over to this chart

right here in a weird way this chart is

actually flip-flopped for the real

estate market and that is that right now

we're actually probably just in the

yellow phase for the real estate market

and we're more likely to see the orange

face over in this region here and we're

more likely to see red over in this

region uh for real estate and that's

because real estate is so much slower to

react and so this is where I really

really right here May June This Is My

Hope and it's my plan uh it could be

wrong we'll see I always like to to at

least make a prediction so that way if

things change at least I know what's

changing and then I can revise my

expectations right but my expectation is

that if stocks do end up moving better

by the second quarter of next year then

I can move into real estate at a larger

pain point in my opinion that's the best

time to invest into house hack not

personal financial advice I'm talking

about myself okay that's potentially the

best time because then I can maybe trim

a little bit from gained positions in

stocks and move those into house hack

that's probably by then we should have

our reg a live as well so that could be

a really opportune time

that does mean though you have to get

through this pain over here first and

the uncertainty of what's going to

happen with the fed and if I am wrong

then here's how this chart actually

looks if I'm wrong okay so let's say I'm

wrong because if possible I'm wrong

right maybe I'm maybe I'm being too

hopeful what if we end up having red all

the way through

Q3 of 2023 and then we actually get our

orange in the stock market and then we

actually get our yellow in the stock

market and we don't actually get our

Green in the stock market until maybe q1

2024 right that's possible that sounds

really terrible and painful but it's

possible

in this case I would not expect the pain

for the real estate market to really

turn orange yet until the end of queue

uh the end of 2023 or the beginning of

uh of 2024. so for me it doesn't really

matter where that U-turn happens where

does that flip happen but in my opinion

that flip happens in a very clear way

stocks hit bottom start u-turning and

then real estate hits bottom whether

that happens and real estate hits a

bottom in in the summer of 23 or in the

beginning of 2024 or even later when it

happens it doesn't matter because I'm

not making moves right now that says oh

I have to be right about the real estate

uh situation right now we're gonna wait

we're gonna get that confirmation from

the FED before we do anything

but that kind of overlay is what I'm

expecting and I'm looking for that

inflection on the SCP for the next real

level of bullishness and unfortunately

that's not until March 22nd I hate to

say it but that's that's three months

away Jan Feb March that sucks we're at

December 23rd now now could there be

bullishness between now and then sure

more CPI data that comes down but really

this is a time of patience and patience

doesn't bode well if you're in margin

right it doesn't do you good if you're

in margin it doesn't do you good if

you're short-term speculating so buckle

up pay attention to what's going on in

the market pay attention to the

summaries I provide in the channel if

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me and learn do fundamental analysis

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bye