This Brutal Bear Model Predicts Nightmare 70% Stock Market Crash
April 08, 2020 @ 18:56 +03:00
We’ve seen plenty of bearish stock market analysis lately, but this might be the most painful yet. According to one model, the Dow Jones and S&P 500 could still fall another 70% from today’s levels.
As you can see in the chart above, that would take us below even the deepest troughs of the Great Recession and the dot-com bubble. That nightmare prediction comes from Bulls ’n’ Bears researcher Michael Markowski. He uses data from the Great Depression in the 1930s and the dot-com bubble to reach his conclusion. He predicts a three-year bear market, bottoming out at the end of 2022. He says this recent crash shares the same “genealogy” as the Great Depression and will lead us into a drawn out contraction. Other analysts, including London’s Odey Asset Management have also used the Great Depression analogy.
According to Markowski, there will be plenty of spikes, relief rallies, and interim bottoms on the way down to his nightmare levels. Here are some of the milestones he predicts:
New stock market lows by May 4th An interim bottom 41% – 44% below record highs by the end of the year. Final bottom in Q4 2022. The recent bounce off the lows, he says, is a classic relief rally. This will top out before April 14th, according to his statistical analysis.
While many analysts on Wall Street think the S&P 500 will retest its March 23rd lows, few share Markowski’s brutal analysis. Some think the bull market hasn’t even ended! Investing legend Howard Marks is even starting to dip his toes back into stocks. Like many, he thinks there’s a good chance this relief rally fades, but that doesn’t mean you shouldn’t start looking for discounted stocks.
This Brutal Bear Model Predicts Nightmare 70% Stock Market Crash, CCN, Apr 8