Expectations for 100bps dropped from 80% to 45% after both Fed officials commented. The market also welcome this. 100bps is not totally off the table though and with Canada central bank actually doing a 100bps few days ago, it set a precedent that Fed might just follow as well. Luckily the oil price had also come down during the last few days so the pressure on Fed to do 100bps is lesser. Else with the political pressure from Biden, Fed might give in and actually do 100bps. I believed the June 75bps instead of the planned 50bps is due to political pressure. Anyway, 2 more weeks to July FOMC, expecting a few more Fed officials to drop their hints. Let's see how it goes.

Will the rebound continue? Here are some food for thoughts. While the FOMC announcement on hike and QT meets market expectations, and Powell comments is more dovish this time, does it means there is a change to the general trend? Hikes will still come and to Fed, 2.4% is the neutral rate so more hikes will definitely come. QT is also going to start and will start to affect the liquidity eventually. So while the FOMC announcement looks dovish this time, more hikes and QT is unavoidable. Valuation will be affected and owners of high valuation stocks will need to be cautious. Tech stocks had a good run during 2020 and 2021 so they are one of those with higher than normal valuation.

The moment I read that the author is suggesting a 8% jump on Monday, I start to be wary. Sounds more like a article to pump price and induce FOMO. If a investor buy, it's because of its good business fundamentals, future growth, etc. Stock split did nothing to improve fundamental or growth. It only at most improve the liquidity of the stock, making it more accessible to more people. So if one really decide to buy on Monday itself, it's more of a move by short term trader/gambler to bet on short term movement. Hope they get their bets right.

I'm expecting another 175 bps hike and the QT to show its effect on liquidity as it goes forward. I'm also expecting the inflation to come down towards the end of the year and Fed to start softening their stance. So I think the market has more room to dip, especially when the July earnings comes out. July earnings are forecasted to be not as good. But I hope the supply chain, Ukraine war, crude oil can improve by Oct/Nov so we can start seeing the market recover. So we may actually see the market going back upwards during Nov/Dec. So guess there will be a bit more pain before the recovery. Don't think the incoming storm will be a big one. Anyway, it's just my guessing.

Many Fed officials are already talking about it during the last 2 weeks but the market still decide to rally. Only when Powell talks about the same thing, the market finally reacted. Basically it's the same that Fed is always talking about. High rates of around 4% is needed, rates are here to stay for some time, and yes, there will be pain. Unemployment will go up, market will slow down and might even experience hard landing. Pain, soft/hard landing are already in the speeches during few months ago. It's a real bear market so let's not bluff ourselves. There will be some relief rally from time to time, even as much as 20%. Make use of it if you have the technical skill but do not mistake it as the start of a whole new bull. Take care and be cautious.

While I don't believe in 3) hold forever, the rest of the 3 are good advices. Just wanted to highlight on quality businesses on sales. While there are many hot businesses that claimed to 5-10x in near future, do note these companies are also carry much risks. There are those businesses that prove to others by becoming the king in their industry and make great profits, but there are also many that eventually don't make the cut and bankrupt/delist . The number of failures outnumbered the success cases by many times. It's just that we only remember the winners and forget about the losers. So the odds is not as high to pick a winner among so many. That's why it's safer to buy proven winners (strong profitable quality businesses) right from the start. While the chance of 5-10x will be low, but

It's a relief rally. Last few rebounds are very short, only 1-3 days. Not sure how long this rebound can last. Powell will be due for a speech on Tuesday. FOMC minutes will be out on Wednesday. Depending on how the Wall Street media portray these 2 events, the rally may extend or might be just cut short and resume it's downtrend. Don't hope for a reversal. It has not come yet. Good luck everyone and stay strong.

What is the chance of Fed doing a 100bps and its effect? Last month, the guidance from Fed for July hike is 50-75. But we know that Fed guidance is not worth anything. How many times had Fed guidance changed during the last minute? June 75bs hike will be a good example for last minute change to 75bps hike just because of May high CPI. Now there is 2 weeks before 26-27 July FOMC. More than enough time for Fed to drop hints. Bostic from Fed had start the ball rolling by saying it's on the table. In my opinion, 100bps can be very possible. But what's the implications? 2Y/10Y yield curve was inverted since last week and start to widen even more with the 2Y yield spiking up today due to market expectations of 100 bps hike. We know prolonged inverted yield of higher magnitude often point to inco

Tomorrow, Powell report to the Senate will reveal more info on Fed plans on how they are going to tackle inflation and their views on the economy. Expecting this week to be volatile with Wall St media interpreting this to fit and push their agenda. What Powell going to say is not important since Fed had already reveal their current plans during last week FOMC. There should be not much new info. What's important is how the media going to interpret it and push the market up or down. If pushing the market up, treat it as a relief rally that will not last more than a few days. Don't get tricked into chasing the rising prices. At this moment, it's still not time to be greedy. Good luck to all.