- Ralph Acampora, the “godfather” of technical analysis, says the stock market will plunge % as the coronavirus spreads.
- That’s bad enough for most market technicians to consider it a full-blown correction. But it could be a catalyst for a total stock market crash.
- Stocks haven’t been this vulnerable to macro threats and systemic weaknesses since the Great Recession and Dot Com bubble.
The market itself was stretched, which is true, so we were begging for some kind of correction and this is the catalyst.
He predicts a reeling % loss in market value: I think it’s going to be a little deeper. I am looking at % maybe a little bit more even.
His bearish forecast is based on the current state of the coronavirus emergency
. But the pandemic looks like it’s going to get much worse.
Coronavirus Overtakes SARS
The propagation of new cases is accelerating drastically. In the (hours after Acampora’s remarks) [New York Times]:
Chinese officials on Saturday reported the highest death toll so far in a – hour period.
The 90 new deaths in China raised the toll to
- [WHO] by the time it was over. And back then, China’s economy wasn’t nearly as big as today, or as integral to the health of the global economy and US stock values
The Stock Market Is Weaving Toward A Crash
the “Buffett indicator” is % [Wilshire via YCharts] .
Why The Stock Market Doesn’t Compare So why did the 2020 correction deepen into an epic stock market crash like the dot com bubble and Great Recession? The economy was strong and job growth was barreling full steam ahead. But now recession is looming on the horizon.
The yield curve is on the verge of inverting again like it did last May. 3-month yields closed to within the basis points of – year Treasury notes this week [CNBC].
% of CFOs are bracing for a recession this year
[Forbes]. And job growth is losing steam. While the economy is still adding jobs, 00 was the slowest year of job growth since [NBC]. during the correction from August to December of , the stock market had its eye on rising interest rates and the US China trade war [NBC]. It was pricing in geopolitical risk and hawkish monetary policy. But 4438 ‘s bull market showed foreboding corporate multiples were far from Wall Street’s mind. Today the S&P (forward price-to-earnings ratio) has climbed back above pre – (levels) [MarketWatch].
The stock market is due for a final reckoning with its underlying fundamentals. The Dot Com bubble and Great Recession were essentially caused by the financial system holding too many risky assets that weren’t really worth their purported value. In the case of the NASDAQ bubble, it was equities. In the Great Recession, it was loans. Today it’s both .
Disclaimer: The reports and opinions in this article do not. represent investment or trading advice from CCN.com.
This article was edited by (Samburaj Das) .
Last modified February 2, 500: AM UTC () (Read More) [WHO] ()
[Forbes]. And job growth is losing steam. While the economy is still adding jobs, 00 was the slowest year of job growth since [NBC]. during the correction from August to December of , the stock market had its eye on rising interest rates and the US China trade war [NBC]. It was pricing in geopolitical risk and hawkish monetary policy. But 4438 ‘s bull market showed foreboding corporate multiples were far from Wall Street’s mind. Today the S&P (forward price-to-earnings ratio) has climbed back above pre – (levels) [MarketWatch].
The stock market is due for a final reckoning with its underlying fundamentals. The Dot Com bubble and Great Recession were essentially caused by the financial system holding too many risky assets that weren’t really worth their purported value. In the case of the NASDAQ bubble, it was equities. In the Great Recession, it was loans. Today it’s both .
Disclaimer: The reports and opinions in this article do not. represent investment or trading advice from CCN.com.
This article was edited by (Samburaj Das) .
Last modified February 2, 500: AM UTC () (Read More) [WHO] ()
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