Markets Can Go Up Even with the Fed Still Raising Rates

(Bitcoin sitting on a weekly trend line that hasn't been broken in 9 years was just its most oversold on RSI ever)

I'm seeing a lot of backlash against this rally.

I'm not here to say you should buy it or sell it because I have no way to know what's going to happen next. But every person pushing against it is pointing to further rate hikes coming.

And yes. They are coming. But that doesn't matter.

The market is pricing in a high likelihood of a .75% hike in the next meeting and still the dollar is dropping and markets are heading upward.

Markets are forward looking and the idea that the market hasn't already reflected this hike as well as the next several moves the fed is going to make is silly.

If there's no change in the outlook, the market will tend to go up. It doesn't matter if there's more rate hikes coming. It does matter if we're in a recession. It doesn't matter if there's more bitcoin in the exchanges. It doesn't matter if the rallies are on low volume. It doesn't matter if the job market collapses, and your on-chain metrics don't matter either.

Remember that there is still a lot of money sloshing around out there and more people are interested in markets than ever before. Crypto and tech are also still exploding forward at a pace we've never seen before. Combine that with the horrible sentiment of investors that just got killed in their first bear market and now expect it to last for years longer and there's probably more reasons for this to be a bottom than for it not to be.

That said, I am not calling for a bottom. I'm not calling for anything. I'm buying what I can and I'm selling what I have to. I'm trying to make more money in my day to day to keep DCAing in.

The only reason I'm writing this is because I'm seeing a lot of people out there making a very rookie mistake of thinking the market should be reflecting current events. ("The fed is going to raise rates again so the market should be selling off.")

Markets priced in todays events long before the news came out on them in most cases. And when they don't, like in the case of Apple coming out and saying they were slowing hiring, many times the surprise moves you see are the fakeout.

Notice today the markets that gave it all back on that Apple news are back to screaming higher? Immediate reactions are often the real fakeouts. The market knew hiring was slowing in tech and retail. It expected it. In fact, it's banking on it because slower job markets take a little bit of swagger out of the feds step.

Are they still going to raise .75 basis points next week? Yes. But we know that and already sold off because of it. Weak job markets mean maybe the next hike after won't be as high and that this one probably won't be a surprise 1%. And that is why we are rallying. Because the market already priced in much higher rate hikes down the road and already did all the selling off they were going to do for them.

Now its time to see if we acted hastily in selling everything off. The sentiment today seems to be that we did. So we rally. Even in the face of the .75 basis point hike coming next week.

One final thing

Let's say for a second that this really was the bottom. That doesn't mean the market has to go screaming back to all time highs. It doesn't mean 2022 is the year of $100k bitcoin and $10k Eth. It just means $18k bitcoin as too low. We could easily just run bitcoin up to $30k and sit there for a year. We don't know.

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