Forecaster Predicts S&P 500 Will Fall 16% More in Ongoing Bear Market
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The author forecasted a two-wave bear market with declines of about 25% each. They believe the second wave started on July 31 and will end around mid-May with the S&P 500 down about 16% more.
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The two sentiment indicators used, MSI and ST-MSI, show extreme bearish readings during bear markets. They have not reached those extreme levels yet, suggesting the downtrend will continue.
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The MSI incorporates 8 long-term sentiment indicators and the ST-MSI uses 7 short-term indicators. Both show sentiment is not bearish enough for the bottom.
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Green zone readings on the indicators signaled past bear market bottoms. The author will remain bearish until green zones are reached again.
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The overall forecast is for a longer bear market correction of the COVID bull market, with two selling waves that resemble separate bear markets.