A powerful buy signal, with caveats

There is an adage on Wall Street that investors shouldn’t fight the Fed (or central banks in general), but the devil is in the details. 

Callum Thomas of Topdown Charts that global central banks are engaged in a broad-based easing campaign. The limited sample of the history of such episodes (annotations are mine) show stocks rose on two of the four occasions (blue lines) and fell in the other two (grey lines). This begs the question of whether pivots to widespread rate cuts are equity bullish.

 

My analysis of the latest circumstances is a qualified “yes”, but investors should be aware of the risks.
 The full post can be found here.