Weekend Insights

The stock market cannot remain overvalued without artificially low interest rates and artificial liquidity. Thus, a soft landing will not be enough to prevent more weakness in the stock market. (Besides, a soft landing is still quite unlikely.)

The major averages are bumping up against key resistance levels. If they're broken, it will be bullish near-term. However, without "free money" and "steroids" (QE), this rally is destined to fail.

It's important for investors to realize that Fed's job description does not include preventing recessions. In fact, right now, they're telling us they'll keep conditions tight...even at the risk of causing one.

The process of taking the markets off artificial stimulus ("steroids") is far from over. It will continue to be a painful process and won't end until the markets are fully "normalized" (and trading on their own). That means more rough seas ahead in 2023.