I fully believe a generational market top will be between Sept 2nd through January 2022. With a 13 year bull run, it is immaterial which month the ultimate top is in. The only reason I am not stating the top is in is first, I cannot know, but second the fear indicator is high, this leaves room for a rally to resume.
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Inflation or Inflation?
Consumer cost inflation is very high, and likely to continue. Cheap goods come from China, and they are in an energy crisis. That means ALL goods from China will have costs go up and export higher costs to the world. Pair that with transportation skyrocket costs and local production disruptions, everything is destined to go up. I actually do think some of it is transitory, but most things will never return to 2019 pricing. Higher prices will cause economic negative impact to profits and growth.
People are demanding higher wages for SOME jobs, and other jobs will see pressure for higher wages to adjust for cost of living. This will force some jobs to be outsourced or reduce company hiring.
Asset inflation of houses and stock market will be under pressure as people have less money to put into these assets.
China exporting inflation, then deflation.
Oil, coal, and natural gas.
USA - All Easy buttons pressed
The US has pressed all the easy buttons to goose the economy since 2008. Low interest rates, trillions of free money, under Trump very low corporate tax and low tax to 'pull US money' from overseas. As a result, there is very little easy buttons to press to goose more out of the economy. Does anyone really think if we enter a recession, lowing 30 year borrowing rates from 3% to 1% will spur material growth?
US dollar IS the global reserve currency
So if America cuts spending due to fears of debt creation, the world will also cut spending, this means a global slowdown.
US Stock markets are at extreme historically high prices
The only way to kick the can, more - Free Money & demand pulled forward.
With free money ending, the fake demand ends, and the poverty stricken America hangover can resume.
If I get this wrong, as I did in January 2021, approval of a large enough free money bonanza could kick the market out for continuing highs until the free money isn't large enough to sustain the new day traders of 2020.
Conclusion
We are very close to a multi-year high, potentially 5+ years, with a 50% market cut (potentially 80%, but I doubt it) However monetary action does matter. if the US resumes free money for everyone the market high is likely quite a bit out. China stops the worlds largest ponzi scheme from collapsing and resumes inflating the bubble, or OPEC and RUSSIA provide maximum energy output my view would change.
Barring these actions, it is not a great time to buy for a 20% gain, but instead good to take some risk off.
Risk off can be US bonds or diversifying into growth countries like India. Alternately take a chance on a deflationary asset like Bitcoin which may do very well in a deflationary collapse. Good luck!