The Most Bearish Two Charts In Our Collection

On our website, thousands of our charts are automatically updated as new data become available. The most bearish of the lot are shown below. The first one shows the Fed's holdings of securities versus the S&P 500. The second shows the former versus the forward P/E of the S&P 500.

We added a dotted line to track the Fed’s QT2, which ramps up in September and will reduce the Fed’s holdings by $95 billion per month, on average. It's an unsettling picture. The QE programs that expanded the Fed’s holdings of securities contributed to the bull market from 2009 through 2021. The fear is that QT2 will result in a long bear market for stocks.