Signs of a eventual bull run (it might be closer than you think)

We know the market enjoys pricing in before major events (as it tends to happens before a FED meeting).

FED's president said if they raise interest rates to 1% it can reduce developed countries GDP by 0,5% and under developed countries by 0.8%. USA had a increase on interest rates from 0% to 3,25% in 8 months.

Why this is important?

Because it can give us signs that we are approaching a real market bottom and we might see a recovery in 2023.

John Williams (president and chief executive officers at FED) said he wants to keep inflation rate at 2% in upcomming years, down from the expected 3% 2023.

To make it a reality, they need to keep increasing interest rates until those numbers are met. and knowing this, the market tend to price it in.

John also said that unemployment rate will increase from current 3,7% to 4,5% by the end of 2023.

FIRST sign that is a strong indicator of market bottom is wage inflation, what does it mean?

After the pandemy we had a lot of job offers and lets say you worked at company A for 1k wage but company B is paying 2k, you would swap ofc. This is a good thing right? Yes and no. Let's understand it.

If wage inflation is, let's say, 10% and general inflation is 7%, it will reduce the company's profit margim because if they have to pay more in order to remain competitive, they will also have to increase products price (but they also have a limit because if they incease too much, clients won't be able to pay for it) to make profit and customers will have to pay more and it's a god damn snowball that nobody benefits.

This can't happen, it needs to be balanced. That's where the bottom of the market is.

SECOND sign is FED-Pivot and what i means is when FED change their politcs and instead of increasing interest rates, they lower them, let's take a look.

As you can see, when interest rates are too high, a fed-pivot happens and it hits a bottom \"right after\".

When will this pivot thing happens?

When job offers reach a balance 1:1 (one job offer for one person and not 2 job offers for one person), the wage inflation and general inflation slow down.

This is important to understand because when you think we hit a bottom, we are already 10/15% above it.

So keep an eye out for the job market, signs of less job offers, less people willing to leave X job for Y , companies paying less etc.

WIth this graphic we can see job offers are on a small decline. When it hits a dip, FED-Pivot will happen and make econmy bullish in response. You can use the website and look for specific dates (2008) and see a good correlation of a bear job offer market, a pivot happening and a bullish market right after.

Regarding inflation, if you look for results around the world there is a clear sign of a SMALL dip, showing inflation is going down VERY slowly, pair this with low job offers/wages (people not having much buying power) and FED lowering interes rates , they will probabily do what they done many times, hit that print money buttom > Booming economy.

This will cause the dollar to be weaker too.

Of course nothing is 100%, and we don't know what will happens at 13th October but have FIAT ready and if we have a bull run at the begning of 2023, don't be surprised.

Safe investing yall.