TLDR
This bull market will be long as the federal reserve cuts rates and other economies look to receive the funds coming forth. Canada, Japan, and likely other economies will raise rates in 2024 and cut later on. When all rates are low, expect peak metrics.
All Bull Market Metrics are measured using the S&P 500 200 Week Moving Average Metric.
The Devastator
Did you ever watch Transformers: The Revenge of the Fallen? The Fallen was a great villain with a very powerful tool called the shock spear. Why am I talking about that now? Because it is the metaphor I intend to use to explain why this bull market will be a long one.
Grabbing Gravity
The Federal Reserve is the leading central bank in this country as the purveyor of the Federal Reserve Note, often mistaken as the United States Dollar. In 2022, Jerome Powell began raising rates from near zero to todays 5.25%. In the process, foreign investors sold their currencies - the Yen, Euro, Pound, Renminbi - for dollars and US Bonds.
In the above Video, The Fallen (at 1:00) begins to warp gravity as a weapon to pull in and manipulate his environment to his liking. Chair Powell has done the same thing, just like most other major economies. The difference is that the Federal Reserve Note has a much more powerful devastator than other currencies.
▼The Reserve Currency
This is a very normal event when you have the reserve currency. In these times, foreign currencies depreciate against the reserve currency and earning interest in the reserve currency is very profitable whenever you sell back to your native currency.
Gravity Release
The Federal Reserve is announcing at least 3 rate cuts next year while believing that inflation has been adequate quelled in the US Economy. Raising Rates has produced devastating effects to foreign economies like Japan, whose currency has fallen about 30% against the dollar and is likely experiencing inflation associated with this.
The same has occurred to Canada whose Currency is fell about 25% at its worse during the Federal Reserve's cycle.
So what is there for these nations to do? It is quite simple, to attract capital to their markets they will likely hold their rates at or near their highs as the US Cuts them. I believe Japan even plans to tighten rates, while Canada intends to hold them.
The Long Run
How does this make a bull market longer?
While we often look at the United States as the flagship money printer, it is not the only money printer. It is the hum of all of the world's money printers in unison that lead to the euphoria caused by memecoin frenzies and call option trades.
The more other nations join this movement to be prepared to accept the capital coming out of US Bonds and Money Market Funds in 2024, traders will have to be prepared for the moment where we begin to cut these rates all around the world.
The 2012 Bull Market began around September 2011 and around February 2016. This cycle was directly associated with the low and declining rates of interest of major central banks. We are entering a period of declining rates of interests, excluding Japan. Interest rates are becoming more predictable. This bull market, which likely began in October 2023 could last some 48 months.
