Rosenberg Research economist and strategist David Rosenberg estimates,S&P 500 IndexA bear market slump might soon be expected, this time by as much as 30%, with downward pressure likely to continue throughout the summer.
NasdaqThe index has fallen by regarding 25% this year and is in a deep bear market, while the S&P has fallen by regarding 16% since its high on January 3. Rosenberg quoted investment legend Bob Farrell’s “Ten Classic Investment Rules” to analyze market dynamics and trends.
Current market dynamics echo Farrell Rule eight,Bear markets have three phases: sharp declines, reflexive rebounds, and longer fundamental declines. “We’re heading into a bear market, the S&P large-cap stocks are gradually falling, and if the S&P falls 30% this time around, which I think is possible, the index will fall to 3,460,” Rosenberg said.
Farrell Rule 3: Excessive behavior never lasts without a new era. Rosenberg posits that the market downturn is the natural result of an exuberant bull market fueled by easy money and excessive speculation, especially over the past few years, the fear of missing out has attracted many new, inexperienced retail investors who naively believe the market will will continue to rise and be fascinated by this belief.
Rule 6 mentions that fear and greed often dominate investors’ long-term plans. Rosenberg said he will be watching for days of market selling pressure and sharp declines, because in other words, there will be a lasting rally.
Rule 1 states that the market tends to revert to the mean over time. Rosenberg advises investors to sell rallies rather than buy dips, predicting value stocks,goldutilities and energy stocks will be winners, at least in the short term, while overall U.S. stocks will have below-average returns.
