2022 Macro Predictions You Need

Hey There Income Hunters,


Hear me now …


2022 will be one heck of a volatile year in the US.


Now, it should get off to a fairly tame start … and then build for a dramatic turn around mid-year. 


But, as always, the macro picture driver will be Fed and US Government policy – and I don’t even think the Fed knows what their policy will look like in H2 ‘22.


But here is what we know IS coming in the year:


  • The Fed will taper their QE down to zero in the next three months. This will lessen the rate of change of inflation but the absolute level of inflation will remain well above the Fed’s 2% target.

  • This shift will cause a tremendous rotation out of large-cap growth into smaller-cap growth that has already been beaten down in 2021.

Today, I’ll share the bigger picture charts to guide you as the year progresses. 


The US Dollar Will BeKey


The dollar will be a critical signpost for 2022. Last year investors held record shorts in the dollar and it fueled a major rally that held all year.


As you can see in the illustration below, investors are holding record long positions in the dollar while it's over bought (and historically this is a very bearish setup for the dollar).


Notice the 62% net speculative positioning of the dollar in the lower portion of the graph. 


If, as I expect, growth slows and equities suffer a deep correction in the second half of the year, the dollar will take out the lows near $89.


This will then trigger a huge shift out of financial assets and into commodities, energy and precious metals.


S&P 500 Index (Ticker: SPX)


I think stocks could grind higher to start the new year because there is still plenty of excess savings. 


However, any rally is a rally to fade because the Fed will remain very hawkish until the stocks correct and we see some lower rates of change for inflation.


Crude Oil (CL1) 


I do not think the oil market is out of the woods yet.


If stocks grind higher this week, oil could make a push higher, as well, but as we get deeper into the Fed tightening I think we could see one more new low in oil – which will be a major buying opportunity.


Bring It Home


I believe ‘22 will be an aggressive trader’s dream market environment. 


Diverging policy trends, a new changing world order and launch of digital currencies will create so much uncertainty and cross-market flows.


My Power Income Trader system can determine the policy impact on all developing countries and get out ahead of all global money flows. 


And join me LIVE for Option Pit’s inaugural TradeFest when I will be presenting low risk/high reward trade ideas on some of the greatest opportunities I see in Q1 22.


Stay tuned and as always …


Live and Trade With Passion My Friends,


Griff

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.