Veteran technical analyst warns S&P 500 may collapse almost 50% as brutal recession hits
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Milton Berg warned that shares may collapse by almost 50% as a extreme recession begins.
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The veteran technical analyst cited investor complacency and extra banking issues as danger elements.
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Berg expects the S&P 500 to fall under its October stage and strategy pandemic lows.
The S&P 500 may collapse by almost 50% because the US economic system sinks right into a extreme recession, a veteran technical analyst has warned.
“There’s one thing very unsuitable with this market,” Milton Berg mentioned. Latest episode From the Steering Ahead podcast. Berg, who runs his personal consulting agency and has beforehand labored as a commodities analyst and dealer, fund supervisor, and advisor to elite buyers akin to George Soros and Stanley Druckenmiller, laid out a bunch of explanation why he’s deeply involved concerning the inventory market’s outlook. .
For instance, Wall Avenue has I grew complacent He mentioned concerning the dangers of recession.
“The fact is that the economic system has been weak and will get weaker,” he mentioned. “We are actually extra more likely to see a recession than at any time prior to now two years.”
Most buyers have moved on Silicon Valley bank collapse This spring. Berg warned that different banks, pension funds, endowments and related establishments have seemingly suffered deep write-downs within the worth of their fixed-income portfolios, as rates of interest have risen over the previous 18 months or so.
“SVB is only a canary in a coal mine, the tip of the iceberg,” he mentioned.
Berg additionally pointed to a variety of technical indicators that present a scarcity of momentum that’s extra in step with a bear market rally than a bull market. Furthermore, A. warned A rare decrease in the money supply Earlier this yr may very well be a “inventory killer.”
“The market has very weak legs to face on,” he mentioned. “That is what you see at market tops, the place the liquidity that’s purported to push all of the markets up…solely a handful of shares go up.”
The chart skilled likened the inventory market to “a drunkard making an attempt to stroll a tightrope” the place “any slight change within the wind can knock you to the bottom.”
Berg mentioned he expects {that a} brutal recession, and maybe a banking disaster, may ship the S&P 500 down greater than 20% to under its October lows — and will even drag it down 45% or extra to its pandemic lows at… From 2500 factors. .
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