Market Strategist Warns of ‘Blood’ on February 1 Ahead of Fed Meeting

Stocks, valuable metals, and cryptocurrencies rallied in the course of the first month of the 12 months, and market strategists are saying that markets might retract within the close to future if the U.S. Federal Reserve retains climbing charges and sustaining a broader tightening coverage. In three days, on Feb. 1, 2023, the Federal Open Market Committee (FOMC) is about to convene. While the market expects price cuts, some analysts assume the Fed will proceed elevating the federal funds price. Chris Vermeulen, the founder and chief funding officer of The Technical Traders, insists the S&P 500 is because of slide 37% decrease than its present place.

Strategist Predicts Potential Market Correction as Powell’s Re-tightening of Financial Conditions is Anticipated

Markets are intently watching the following Federal Open Market Committee (FOMC) assembly, scheduled to happen on Wednesday, Feb. 1, three days from now. Last week, Bitcoin.com News reported on how traders are intently following the choice of Jerome Powell, the sixteenth chairman of the Federal Reserve. As the FOMC assembly approaches, discussions in regards to the end result have been widespread on social media.

A market strategist generally known as “The Carter” explained on Jan. 27 that “there will be blood on February 1,” referring to the turmoil that markets could face after Powell addresses the nation. While some traders expect a dovish Fed and doable price cuts, Carter argues that Powell will as an alternative proceed to tighten and implement restrictive coverage.

The analyst notes that Powell has beforehand referred to a “broader tightening project” in three phases: fast hikes to succeed in a impartial price, measured hikes to succeed in a “sufficiently restrictive” price and staying on the terminal price for a while. ‘U.S. Federal Reserve Chair Jerome Powell will re-tighten monetary situations by forcefully addressing price cuts head-on,’ Carter careworn in a Twitter thread.

The strategist expects that the Fed chair will deal with this subject forcefully on Feb. 1 and shift the dialog in the direction of how lengthy the Fed wants to carry on the terminal price and why. “Look for him to expand on the lessons of the 1970s,” Carter wrote. “Why the market continues to punch Powell in the face and not expect a counter-punch is beyond me. This is the craziest market set-up right here, right now. There will be blood on February 1.”

Expert Predicts 37% Drop in S&P 500, While Gold and Silver Set to Shine in Bearish Market

Speaking with David Lin, anchor and producer at Kitco News, Chris Vermeulen, founder and chief funding officer of The Technical Traders, said that shares are due for a correction.

“I honestly think that the S&P 500 could fall another potential 37 percent, roughly, from current levels,” Vermeulen informed Lin. “That is enough to create a lot of damage, a lot of stress, lots of bankruptcies, you name it,” he added. In distinction, Vermeulen expects gold and silver to shine all through the bearish market. “This is when precious metals and miners take off,” Vermeulen insisted whereas discussing market cycles.

Vermeulen will not be the one investor who believes gold and silver are set to take off. In December 2022, the supervisor of the AuAg ESG Gold Mining ETF, Eric Strand, stated that gold will see a brand new all-time excessive in 2023 and central banks just like the Federal Reserve will pivot on price will increase.

“It is our opinion that central banks will pivot on their rate hikes and become dovish during 2023, which will ignite an explosive move for gold for years to come,” Strand said. “We therefore believe gold will end 2023 at least 20% higher, and we also see miners outperforming gold with a factor of two.”

While gold has been on the rise and 2023 expectations are excessive, Harry Dent, the founding father of HS Dent Investment Management, has a contrarian view about gold’s efficiency this 12 months. Dent predicts the yellow valuable steel might lose $900 to $1,000 over the following 18 months.

What are your ideas on the potential market correction? Do you agree with the analysts’ predictions or do you will have a distinct perspective? Share your ideas within the feedback part under.