22Dec11:09 amEST

A Slow Developing Bear But Dangerous Nonetheless

Some bear markets, like 2008, feature an angry, rabid bear prowling the campgrounds for food and ravaging anyone and anything in its way, even some things and people not in its way. 

Other bears, like 2000-2002, the 1970s, and perhaps this bear, are more slowly developing, with a cute little baby bear at first stealing some Peppermint Pattys from the campground, hiding back in the forest for an extended period of time before venturing back for more goodies. 

Eventually, though, the cute little baby bear grows up into angry grizzly. And I expect this bear to be no different as the calendar flips to 2023. 

On that note, at the epicenter of the American economy for a good while now has been the robust, credit-hungry consumer all too eager to spend money they do not have, to the point which would make a drunken sailor blush. 

Visa, a Dow component, and iconic brand, is still front and center for me to reverse its decade-long plus steep uptrend, seen on the monthly chart, below. I noted throughout the last year or two that Visa's upside momentum was waning. 

However, as you can see and as I know all too well, this bear been a slowly developing one, which means Visa is teasing a major top but we still need to see the actual downside follow-through. 

That said, I have a high degree of conviction it is coming next year, as the mighty consumer finally succumbs to prolonged higher rates, inflationary prices everywhere we look (even if headline is coming down off historical highs, the prices are still elevated), and a slowing economy as more layoffs are announced. 

In addition to the usual and expected post-holiday slowdown I expect the above factors to exacerbate a tough first half of 2023 for Visa (and MA, AXP, DFS, etc.) as it finally becomes obvious a new regime change is upon us for years. 

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