This proprietary indicator is firmly in bear market territory. Even raw leadership data is compelling, as the majority of days continue to see more stocks hitting new 12-month lows than new highs on both the NYSE and the Nasdaq. In the monetary arena, every U.S. bear market of the past 40 years has unfolded while the Federal Reserve was tightening. This is a common, widespread question, and you're right, we should revisit this myth. Money flows through the market - and it's rising or falling expectations that drive stock prices.
Proof lies in historical fact.
The majority of that increase came in rising valuations fueled by soaring expectations. For one reason, because Alan Greenspan is more worried about the economy than Wall Street. The dilemma comes from the Fed being too willing to step in too soon at the first sign of trouble. Inflation expectations are rising. At first, Wall Street celebrated the rate hikes - thinking each increase would turn out to be the last.