"Calendar" Reference Materials■Stock Market Cycle in Response to Interest Rate Policies

*The following is a document posted by me, Neko Kumamon, on X.com in 2022. Please feel free to refer to it!

(Note) ■ Stock Market Cycles
① Financial Market, ② Earnings Market, ③ Reverse Financial Market, ④ Reverse Earnings Market
Investors with assets exceeding 0.5 billion are secretly guided, with two buying opportunities

🟦Stock market cycle

⭐①Financial market
・Corporate performance decreasing
- Interest rates down
・Stock price increasing
(Growth stocks' future potential is popular. Profits are not necessary.)

⭐②Performance market
Corporate performance is rising (though unstable after interest rate tightening)
Interest rates are decreasing but expected to increase (turning point)
Stock prices are mixed
(Stocks with good performance are popular. Depending on the stock, there is a clear divide between winners and losers.)

⭐③Reverse financial market
Company performance is up (peaking).
- Interest rates ↑
Stock prices are falling.
(Value stocks are popular. Money flows from stocks to bonds causing a sharp decline.)

⭐④Reverse business performance market
Company performance is down (fundamentals deteriorating!)
Interest rates are up and down (turning point)
Stock prices are falling.
(Money is flowing into large-cap stocks while flowing out of Australian small/mid cap stocks.)

(Reference: The Fifth Market)
⭐🎓Golden Age Market🎓

"Originally, in a reverse financial market, stock prices should fall, but they are high now. The Goldilocks market was born as a result of central banks providing forward guidance to lower volatility. With money available, there is no reason to sell stocks, and bankruptcies are prevented by shadow banks."
(Youtube Market Analysis by Mr. Okazaki)

- YouTube

(Analysis as of 2022/12/1)

Even with an inverted yield, stock prices may rise during a rate hike.

- Check the cycle diagram of long and short-term interest rates from the text below. Currently (2022/12/1), it corresponds to "2. Inflation Rising" on the right diagram.
- In the explanation, when it is at stage "2", it says "Basically the economy is good, so although sustainability is in doubt, stock prices are rising."
However, unlike the diagram, it is an inverted yield.
In theory, it's trending upwards now!

In other words, until interest rate hikes plateau, long stocks will be the trend to follow!!

😂 Everyone seems to welcome the narrowing of interest rate hikes, however,
The theory is suggesting that at that time (at stage 3), it will enter a downtrend! ...How ironic~lol

(Oh no, I have a NAS short position... lol, maybe I should lighten up on the next dip lol)

(Transcription of 12/1/2022. The figure below explains point 3)

(by NekoKumaMon)