Bear market Is coming with S&P 500 rally stalling soon, DeMark says US stocks are in for another drop that will eventually lead to a bear market in the coming months, according to veteran technical strategist Tom DeMark, who accurately called this year’s top in February and subsequent April low. DeMark — a closely-followed analyst who’s advised billionaire investors including Paul Tudor Jones, Leon Cooperman and Steve Cohen — uses a system for predicting where markets will move, divined from a half century of chart gazing that’s based on mathematical relationships. He focuses on trend exhaustion, with his mantra being markets top on good news and bottom on bad news. A confluence of technical indicators, sentiment shifts and cyclical timing models are flashing caution signs, suggesting a drop in the S&P 500 (^GSPC) below 4,835, this year’s intraday low in early April. That would represent a more than 20% drop from the gauge’s February peak, pushing the index into a bear market. “A top is imminent. Too much technical damage has been done,” DeMark said by phone. “Stocks are vulnerable right now and can easily get hit pretty badly if anything quickly changes on the global trade outlook.” DeMark’s warning comes amid a stock-market rebound that’s put the S&P 500 Index on track to erase all of its losses suffered after President Donald Trump’s tariff announcement last month. The gauge is up for a ninth straight day Friday, which would mark its longest winning streak since 2004. A near-term top in the market may happen within days, whose firm DeMark Analytics LLC specializes in identifying market turning points. Specifically, the 5,669 level — which is right around where the gauge is currently trading — will likely leave buyers exhausted, said DeMark. The prediction is based on DeMark’s “countdown” study that involves comparing a security’s closing price to its highest or lowest levels four days earlier. Cycles of “exhaustion” develop when a pattern continues nine times. The S&P 500 just produced its seventh count on Thursday. DeMark focuses on a string of nine daily moves, which don’t have to be consecutive, but do have to be better than four sessions ago. That means two new closing highs for the S&P 500 would likely trigger sell signals, DeMark said. Once that happens, weak technicals will pressure the index to resume its prior decline and eventually push the S&P 500 below 4,835. “Historically, markets don’t bottom on good news, like last month on positive trade developments,” DeMark said. “Stocks typically bottom when everything is terrible and everyone is forced to throw in the towel — but that hasn’t happened yet. Stocks were just way oversold and overdue for a bounce. Ever since then, equities have struggled technically underneath the surface and are in danger of a big drop.” ********** FOMC Calendar May 6-7 Fed Watch Options Expiration Calendar A possible path for this scenario. Sun__Mon___Tue__Wed___Thu___Fri___Sat __4_____5_____6______7______8_____9___10 __11____12___13_____14_____15___16__17 __18____19___20_____21_____22___23__24 A possible path if DeMark is correct. The current expectation (per Fed Watch) is that the Fed will leave rates unchanged when they announce on Wednesday afternoon (May 7). The Market will be slightly disappointed about not getting a Cut, so a Dip that eventually gets bought for an expected Rise in OPEX Week (May 12 - 16) May 16: Monthly equity, index, and cash-settled currency options expiration date and PM settled index options cease trading We muddle through May 12 - 16 and then things get gloomy starting May 19 when Trades for Monthly Options are being reinstalled. Maybe things go differently than the above and maybe DeMark is wrong and it is all Sunshine for quite a while longer.
Maybe he will be right and maybe he will be wrong. Do you know of a Guru that stands out from the rest?
Warren buffet returned 5,502,284% at Berkshire over his tenure, so maybe him? The bear guys always call bear markets and then they are right 1 out of 10 times.
Warren Buffet (via Berkshire - Hathaway) has been a bit heavy on Cash this year. Warren Buffett Reveals Why Berkshire Hathaway Has a $347 Billion Cash Pile; This Is How ‘We Have Made a Lot of Money’ ...When asked why Berkshire has continued building its Treasury stake while trimming equities, Buffett responded with a familiar yet pointed observation: “The one problem with the investment business is that things don't come along in an orderly fashion — and they never will.” It’s a sentiment that underlines one of Buffett’s most consistent themes: in a world of short-term momentum and market noise, timing matters far less than price. He added, “We're running a business which is very, very, very opportunistic,” signaling that Berkshire isn’t merely parking cash — it’s waiting with intention. From Stocks to T-Bills: A Tactical Retreat Berkshire’s cash-heavy stance is no accident. The firm has now reduced its equity holdings for 10 consecutive quarters, even as major indices hover near record levels. The S&P 500 Index (SPY) remains less than 10% off all-time highs, buoyed by investor enthusiasm for technologies like artificial intelligence (AI) and quantum computing. But that optimism has pushed valuations well beyond levels Buffett tends to tolerate...
Worth noting that Berkshire's cash pile is what was reported for their Q1 financial statements. We don't know if Berkshire bought the dip in April.
Everything pumping. Fintwit seems to be talking about $TSLA to 325 to 350.. Just broke above the 200DMA which has been resistance since early march..
I sold a little Tesla today at $300. Bought at $185. I'll redirect some of those profits off the top of my long stock investments (when they are up enough on good days for my tastes to sell) into some income-generating ETFs when the prices come down in the next crisis. In particular, JEPQ and IDVO I will be increasing investment in for the call option premiums and dividends. These funds work similarly but JEPQ is US NASDAQ stocks and IDVO is international stocks. Both pay out monthly. I also do some RHP REIT and some UTG closed end fund. I'm increasingly taking profits off the top from other investments (eg growth stocks that don't pay out dividends) and moving that money into income-generating ETFs and stocks when they are discounted. It's a process.
We got a trade deal with China apparently. Not too get too political but it seems like something has completely flipped in the administration since Waltz got kicked out. It is so many things that it has to be noted. Spoiler B2 bombers left Diego Garcia Talk of integrating Iran into the international community and allowing them to enrich uranium for fuel Saudi nuclear power development programs allowed Direct negotiations with Hamas for a ceasefire and humanitarian aid It seems like we are breaking from Netanyahu A potential ceasefire with Russia and Ukraine which likely means we are dropping support for Ukraine. Bessent and Miran have been reined in and Miran has looked increasingly like a fool Potential China Cold War averted? Trump world is always chaos but maybe it's swinging back towards a period of calm?
The first 100 days of Trump I was also very chaotic. Now that Trump has paid his debts, we will start to navigate from EO's to legislative. I think the markets have come to the conclusion that nothing will stop the debt train and saving half a billion is not going to cut it. The middle class dream is over.
