Waiting for the Music to Stop

After appearing almost apologetic to taper and then tighten earlier during this inflationary cycle, Fed Chair Jay Powell now seems to be ramping up his rhetoric (and especially his leaks to The Fed's mouthpiece at The Wall Street Journal) regarding a decidedly hawkish bias until further notice. 

Just yesterday, it was leaked that The Fed may tightening by a full 100 basis points at the FOMC in two weeks. And now the market seems to be rushing to price that in, with a heavy broad selloff into late-morning. That said, some bios and growth stocks are once again not getting crushed and, in fact, are comfortably holding most of their recent gains, especially some of the better actors in the XBI ETF. 

True, it could all just be summer chop. But as the Dollar soars again and most commodities (save natural gas, which I went long again yesterday) are getting whacked, the risk of a major market dislocation still seems present--I am not trying to be alarmist but seeing the Dollar relentless bid higher is typically a red flag. 

The great irony is that The Fed created this entire beast--A market which craved QE/ZIRP, threw tantrums until it got it for over a decade. And now it has become so used to it that even with the opposite already underway--QT and rising rates--The market just does not want to accept that a dovish pivot is either very far off in the future rather than imminent, or instead that we first would need a horrific crash for Powell to even consider it. 

Until then, we still have the likes of TSLA, bear-flagging below on its weekly chart trading with a PE north of 90. Earnings are next week, and I am curious to see if the market is still of the mindset to reward a stock, even unique TSLA, this richly valued.