A combination of factors indicates that the next bearish wave should now begin on global stock markets.

Turning points in the markets are sometimes news-related, but often not. Of course, the news event is usually referred to after the fact in the subsequent narrative, but this is often a retrospective attribution. Often the movement fizzles out, and the net balance of underlying flows shifts due to long-term fundamental factors.

We are experiencing an unprecedented shift in the inflationary regime. Such inflation levels have been seen before (over 40 years ago), but never in such a direct and rapid transition from decades of low inflation. Thus, the market will continually underestimate the extent of the problem.

In fact, US yields continue to rise. At Jackson Hole, Jerome Powell will likely abandon the "delusional" idea of a Fed pivot by 2023, focusing on the threat posed by entrenched inflationary expectations. The reporting season has largely ended and emphasized that companies can only maintain margins as long as they have substantial pricing power and see no decline in demand. Consumers are still free to spend, but as the labor market begins to cool, it is increasingly dependent on borrowing—a resource effectively being shut down by tightening policies.

The S&P 500's forward 12-month P/E ratio is at 18.2, higher than any level seen from June 2002 to October 2017! Stocks are expensive again as quantitative tightening gains momentum. Other engines of growth in the world - Europe and China - are running out of steam. There are too many fundamentally bearish reasons to put together.

Technically, we have recovered well in the 50%–61.8% Fibonacci retracement field from January's all-time highs.

Coincidentally, we also stopped short of the 200-day moving average, which was a useless trading guide.

But if the market pulls back, you will see many armchair commentators get excited about it too, creating bearish information waves.