This trader sees a 43% drop in the S&P 500 and says take shelter in these ETFs instead.

in us call of the dayThe former Wall Street investment banker warns that the cards are stacked against the stock market for the foreseeable future and offers charts to support that.

in us call of the dayThe former Wall Street investment banker warns that the cards are stacked against the stock market for the foreseeable future and offers charts to support that.

From Him latest blog post this shows CBOE Volatility Index or VIX
VIX,

bounced off a trendline that in the past had shown that index’s previous lows and this year’s tops in the S&P 500:

He said:

Then there’s all that upside, despite a bear market that lasted nearly a year, that Bull/bear Ratio reached historic price gains at the market top in early 2022 and is still in the middle of nowhere. in the region is very optimistic, he said.

“This bearish technical setup for the stock market, combined with the over-optimistic investor sentiment as the Fed raises rates leads to a recession, suggests that the stock market could be on to a new start soon. another big bear market sell-off,” said Wolfenbarger. That recession begins on any given day and ends sometime in late 2023 or early 2024.

Far from the more upbeat forecasts seen elsewhere on Wall Street, the money manager is targeting 2,250 for the S&P 500, down 43% from current levels, although bottoming out in mid-2023 That bear market will last a total of 18 months, not far from the 17-month bear market seen during the Global Financial Crisis.

But don’t rush to speed up the shopping carts. Based on current stock market valuations close to the peaks of the 2000 and 1929 Tech Bubbles, the S&P 500 is likely to be at least 25% lower over the next 10 to 12 years, he predicts. .

His advice? Sell ​​“risky” assets such as stocks, commodities (including energy stocks, which will drop with oil when the recession kicks in) and cryptocurrencies – highly correlated with public stocks turmeric. Treasuries will be riskier than usual during a recession due to high inflation, he added.

“For those who are risk averse and want to wait for this bear market to pass until the next bull market begins, you can buy Treasuries and safe floating-rate bonds and relatively high yields,” said Wolfenbarger, a proponent of an ETF, such as SPDR. Bloomberg’s 3-12-month T-bill ETF
RECEIPT

and WisdomTree Floating Rate ETF
USFR.

For aggressive investors looking to make more substantial gains from bear markets, he suggests inverse ETFs that rise when stocks fall, such as the ProShares Short S&P 500 ETF
SHOW

and ProShares Short QQQ
PSQ.

Those who want to be even more active can buy double inversion ETFs, such as the ProShares UltraShort S&P 500
SDS

and ProShares UltraShort QQQ ETF
QID.

An investor looking to profit from falling oil prices can buy the dual inverse oil ETF ProShares UltraShort Bloomberg Crude Oil
SCO.

“Once the Fed starts cutting rates and the recession stabilizes, we will look for stocks that become oversold (we focus on key technical indicators for this such as the weekly RSI). weekly and monthly and Bollinger Bands) to profit from this bear market and then position for the next bull market with individual stocks and leveraged long and long term ETFs,” he said. speak.

Read: One of Wall Street’s biggest bulls now sees stocks fall early next year as Fed ‘tightens’

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share
DJIA

SPX

COMPUTER

post data is flat to slightly lower. Dollar
DXY

under pressure and oil
CL

has gained a foothold on profits. Read more in MarketWatch’s live blogs.

Read: Deepest Treasury Curve Inversion in More Than 4 Decades Offers an Upbeat Spot for Investors

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rumor

PCE price inflation modestly increased by 0.3% in October, indicating Easier in pricingand consumer spending rebounded, but at a cost savingwhile weekly jobless claims withdraw. Still next is the Institute of Supply Management’s construction spending and manufacturing index. And more Fedspeak: February Governor Michelle Bowman at 9:30 a.m. and Fed Vice President of Supervisors Michael Barr at 3 p.m.

Salesforce stock
CRM

falling behind disappointing revenueIdol. The customer relationship cloud software giant also lost another CEO. Software maker Splunk
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climbing optimistic forecastand Okta
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Co-founder and CEO Reed Hastings acknowledges the streaming giant should have added ads years ago.

Tesla
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Legislators are likely to step in and stop what might happen a strike paralyzes the railways.

In an effort to prevent further unrest, Beijing will report allowing people at low risk of infection to isolate at home, but they must first commit to not leaving in writing, aided by magnetized sensors mounted on their doors.

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