Man-Made Macro Cycle: Key Insights for Market Corrections
How unprecedented policy responses from 2020-2022 reshaped economic cycles and are now paving the way for a potential bull market correction.
For many, the years 2020-2022 seem like an economic anomaly—a surreal period marked by a global shutdown, historic money printing, and zero interest rates that defied traditional market logic. During this time, supply and demand dynamics were turned upside down. While macro values typically cycle between Improving and Declining twice a year, 2022 alone saw five complete cycle turns. This acceleration, driven largely by man-made interventions, rendered historical comparisons nearly obsolete and set the stage for what many experts now refer to as an inevitable stock market correction.
Before 2020, 2019 provided a stable benchmark with moderate growth, manageable inflation, and maximum employment. Macro indicators at the close of 2019 even suggested an overweight allocation to equities. Then came the 2020 lockdown. The cascade that followed—supply chain bottlenecks, a surge in demand, and unprecedented shifts in consumer behavior due to massive PPP infusions—created a unique environment. With artificially suppressed supply and skyrocketing demand, inflation was exacerbated, setting off a series of events that culminated in what many are now calling a market correction.
Today, as we see signs of a bull market correction, the echoes of that chaotic period are still apparent. Despite the turbulence, the job market remains robust, wages continue to outpace inflation, and the stock market is entering what appears to be the final phase of a prolonged bull run. This correction is not the crash of 2008—it is a recalibration. A market correction, even a bull market correction, is a natural response to overextended valuations and imbalances in supply and demand. It offers a critical opportunity for investors to reset their strategies and prepare for the next phase of growth.
Our current macro environment suggests that while the past few years were marked by extraordinary, man-made shifts, the fundamentals are beginning to revert to historical norms. We now see clearer signals in inflation data, consumer spending patterns, and interest rate adjustments that hint at an impending realignment. Below GDP chart shows how 2023 is back on trend, as if the prior 3 years were a contained chaos.
2023 is going to be the year after 2019 - job market still strong, wages growing ahead of inflation, and stock market in the final years of a bull market run. These shifts provide valuable insight into the potential magnitude of the upcoming market correction. Traders and wealth advisors who understand these cycles are uniquely positioned to capitalize on these changes, turning what might seem like volatility into strategic opportunities.
At MarketModel Trades, we leverage these macro insights to help you navigate these transitions. Our data-driven approach turns the chaos of recent years into a roadmap for the future—whether you're looking to profit from a market correction or prepare for the next phase of a bull market correction. By focusing on actionable insights rather than fleeting headlines, we provide you with the edge needed to make informed decisions in any market environment.
If you're ready to gain a deeper understanding of these cycles and position your portfolio for the next big move, join us. Read success stories from clients profiting from our strategies during a stock market correction and discover how you can turn macro trends into trading opportunities.
Explore more on our website and see how MarketModel Trades can be your trusted guide through these evolving market conditions.
