Downgrade of rating.

Institutions have missed out on this round of retail investors' overbought rebound.The previous article mentioned that the recent rebound's Block Buy has all been from retail investors! Institutions have instead been unloading their positions, and the current level is already close to the end of the rebound.

Therefore, Institutions continuously release Bearish news using usual methods to create stock price declines, so that they can buy at the bottom. This round of decline may likely be lower than the previous one, as Institutions have not bought at the earlier positions and will definitely buy at lower prices.

We have observed that after Fitch and S&P downgraded the U.S. investment rating from AAA to AA+ nearly two months ago, the market has consistently declined. Therefore, it is clear that this round is intentionally releasing significant bearish news to suppress the retail market. This rebound has moved from oversold to overbought, which is very irrational behavior. Please note,Buffett still Holds a massive amount of Cash.

Morgan Stanley has already released news that if there are no interest rate cuts in 2025, what will retail investors do?It is clearly a deliberately released Bearish message.We will not go into detail here about whether the Federal Reserve will cut interest rates, but it is evident that Powell is currently finding it difficult to decide whether to cut rates, as the inflation issues brought about by tariff policies may likely have a lag, similar to how Walmart needs to consume inventory before raising prices.

Therefore, it is highly probable that Powell will opt for an interest rate cut, but it requires an opportunity.We can also see that Powell has modified the conditions for interest rate cuts in the latest meeting.

Originally, average inflation was used as an Indicator, but now it has been given a way to backtrack, meaning interest rates can be cut without looking at average inflation, that is, when inflation is abnormally high, interest rates can be directly lowered. Therefore, the Bearish news released by Morgan Stanley is somewhat unrealistic!

Bears have already stocked up on ammunition.This decline is very likely to exceed the previous round of gains.

Because next month there will be more significant issues regarding the repayment of U.S. Treasuries, could the U.S. possibly allow the bond market to crash? It is not possible! The importance of U.S. Treasuries far exceeds that of U.S. stocks! Sacrificing U.S. stocks to save U.S. Treasuries is entirely reasonable!

However, the real crisis for US stocks may still occur around August, so this round of decline may continue until the end of June or early July. We will wait and see, this is just a personal opinion and does not constitute investment advice!